Naked Brands are a new kind of brand — enabled by social media, powered by personality, and built for the digital age: 

1. Naked Brands are transparent.

2. Naked Brands are founded by social media influencers.

3. Naked Brands prize on-going communication with fans and customers.

Since writing the original Naked Brands post, I’ve applied the concept to finance, fashion, music, and basketball. Now, I’m writing a book about Naked Brands. 

This book project requires an extensive research process. I plan to conduct many interviews with writers, influencers, and entrepreneurs. The interviews will all be public and will live right here on my website. We’ll go on this journey together — you and me. Together, we’ll cross industries, speak with experts around the world, and explore the past, present, and future of Naked Brands.

If you have ideas or feedback, please send them my way. You can find my contact information here. I look forward to hearing from you.

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Taylor Pearson Background

My guest today is Taylor Pearson, an author, and an entrepreneur. I first met Taylor in 2016, when I interviewed him on the North Star Podcast. His book, The End of Jobs, gave me a new perspective on the future of work and influenced my career in countless ways.

You can connect with Taylor on Twitter here.

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David: Who is your favorite Naked Brands and why do they stand out to you?

Taylor: Scrolling through my Twitter feed, here are the names that jump out:

1. Venkatesh Rao – refreshingly self-aware and willing to call himself out. Also very smart.

2. Jodi Ettenberg – You can really tell she cares about both her subject matter and her fans.

3. Brent Beshore – Has done a good job positioning himself as the anti-Private Equity, Private Equity guy.

4. Patrick McKenzie – Funny, smart and honest. Legitimately cares about helping people and that comes through.

5. Seth Godin – The OG of naked brands IMHO.

6. Patrick Collison – Manages to run a giant company but still spend a lot of time sharing his thinking. Smart.

7. Ben Thompson – Pioneering a new business model for media that relies on the tight interaction between publisher and reader.

David: How to Get Lucky: Focus on the Fat Tails was one of the first blog posts I ever read of yours. How can Naked Brands use the wisdom of Fat Tails to increase their upside?

Taylor: Two things stand out.

First, publish a lot! The costs to publishing are so low now that mostly what holds people back is being self-conscious and getting in their own heads. You never what shower thought is going to go viral so you might as well tweet nearly everything. There are lots of interesting debates we can have about what type of content does better or worse, this is almost never the issue. I like the way blogger Mark Manson puts in a Quora response:

“Until you’ve written hundreds of thousands of words, you have no clue what you will enjoy writing about or what other people will enjoy reading from you.”

Once you have a few hundred thousand words under your belt in any format, then you’ll have a much better idea of the particulars.

Second, I think for many online Naked Brands, in-person interaction is often one area of fat tail exposure that is very underappreciated. I’ve found that physical+digital is a 2+2=10 sort of situation where the whole is greater than the sum of its parts.  One reaction to this might be “But in person doesn’t scale” which is only sort-of true. As YC founder Paul Graham has pointed out, some of today’s most successful companies started by doing things that don’t scale.

David: One of your most popular essays is called Blockchain Man. In it, you describe the shift from Peak Centralization in 1974 to a world without transaction costs where the equilibrium size of a corporation tilts towards one person. In that world, everybody is a “Naked Brand.” How should small, one-person corporations think about marketing?

Taylor: I guess the most obvious thing is that Naked Brands should think about marketing. Period. Most people don’t think about marketing/selling themselves as employees, but that’s exactly how you get better jobs or as a freelancer/Blockchain Man, that’s how you get better gigs. Your Twitter/LinkedIn/Blog can be a huge lever for your career if you use it right.

For the Blockchain Man, her personal brand (AKA reputation) is paramount.

One of the paradoxes of a world defined by an abundant amount of data and information is that it becomes impossible to understand all of it.

If I asked you why you believe that the U.S. did land on the Moon in 1969 and that it wasn’t a conspiracy theory, what would you say? For pretty much everyone, the answer would boil down to the fact that you trust the experts who have looked at the evidence themselves and confirmed that it is indeed likely.

You have not spent days or weeks pouring over all the data presented by conspiracy theorists and addressed each of their points.

I trust that the thousands of scientists which have said that moon landings really did happen or that participated in them are telling the truth.

In a hyper-specialized system of knowledge, it doesn’t make sense to investigate everything on our own. Increasingly, our appraisals are not made of the content of information, but rather at the social network of relationships that have shaped the content.

If you hear something from five different friends from different social circles all of whom have a reputation for being reliable, then it makes to have a high confidence level in that information.

As you start to release your work, you will develop a reputation around that subject matter, which will make you a trusted source.

The advent of Twitter started to shift the focus in the media from publications to journalists. I follow very few publications, but I follow journalists whose work I trust regardless of who they write for.

The reputations these journalists are able to build up also gives them much broader career options. A journalist with a hundred thousand twitter followers can more easily move to a new job and take their reputation with them.

This will be the case for The Blockchain Man. If you constantly release your work and build up a reputation around it, you will have many more career options. This ties in nicely with my point above: publish a lot!

David: Many startups believe that advertising is proof of weakness in the product or distribution strategy. But Naked Brands are essentially marketing companies first and product companies second. What gives?

Taylor: For one, marketing vs. product is a false dichotomy. I’ve been experimenting a lot more with tweetstorms in the last year because they are super helpful to both marketing and product. The marketing part is obvious, but I get super real-time feedback on business decisions as well which is incredibly valuable.

However, there is a clear trend towards marketing in the economy. At a very high level, in the early 20th century the bottleneck was producing stuff. And so the industrialists and factory owners were the fastest growing segment. There was a huge latent demand for relatively inexpensive, high quality manufactured goods.

Over time that latent demand got quenched and we went into the Mad Men era where you needed to stimulate demand. There was an abundance of products and not enough time to notify people about all of them. Advertising shifted from informational – “hey, we make this thing” to aspirational/persuasion driven – “many companies make something like this but ours is better because it will let you be like James Dean.”

That trend has continued with it getting easier and easier to manufacture products. Software and AWS is one recent instance of this, but it’s also true for physical products. Over the last ten years, manufacturing in China has become remarkably easier. I worked with a company that did a $50k order in China in 2008 which was unheard of. In the early 2000’s minimum order quantities were half a million and in the 90s, they were multi-million. Lots of people do $5,000 in orders from China now and Chinese factories are much more connected and savvy then they were in 2008.

David: What is the fundamental difference between marketing in the internet age and marketing in the pre-internet era?

Taylor: Zero marginal cost. You can start marketing before a product exists. You can start a blog/Twitter/newsletter/Youtube about something interesting to you and figure out the product after. Historically, that was impossible because marketing/advertising was expensive.

David: You’ve written about the idea of legibility and illegibility. How can Naked Brands take advantage of necessary ingredients that are hard to measure? 

Taylor: Legibility is a concept from James Scott’s seminal work, Seeing Like a State. It’s not a book that lends itself well to one-sentence summaries, but my attempt is “we assume that only what we can measure is real and everything that is real can be measured.”

The book is titled Seeing Like a State because the idea of legibility as I’m using it here arose with the modern nation-state in the 17th and 18th centuries, the first gatherers of “big data,” aka the census record. The advent of this “big data” led to the emergence of a group Scott calls “high modernists.”

High modernists think the rational way to organize something is with a geometric aesthetic. That is, they want to make it legible. They lay out their cities on grids, which if you’re like me, you’ve probably always thought was a pretty smart idea.

A map of downtown San Diego is much more legible than a map of London. If I asked you how to get from point A to point B in San Diego, it’s pretty easy to figure out, not so much in London.

Let’s look at an example that’s a bit different than cities, but illustrates the concept well: early modern German forestry.

The arrival of scientific forestry in the late 1700’s was part of a larger movement called cameral science, which sought “to reduce the fiscal management of a kingdom to scientific principles that would allow systematic planning.”

This seems on the surface an altogether reasonable thing to do. The German government wanted to be able to forecast and plan how much timber could be harvested each year to be able to provide enough firewood to their citizens and ships to their sailors.

And in the short run, making the forests legible was a resounding success: The new forests produced more timber which Germany needed and that timber was more uniform, and thus usable by manufacturers.

However, the exact step which created all these benefits, the simplification of the forest into a timber machine, ignored everything which did not lead directly to timber yields. Yet, those aspects of reality remained: the unseen but important processes, the need for elm leaves to treat cattle.

The negative consequences of forcing the forests to become legible to their planners didn’t become obvious until after second rotation of trees to be planted, about a century later. This is important to note: the first-order effects, what happens right away, are often beneficial; it’s the second and third-order effects of forcing legibility onto an illegible system that cause problems.

It turns out there was a complex process going on in the illegible forests involving soil building, nutrient uptake, and symbiotic relationships between fungi, insects, mammals and flora, which were not fully understood. Forestry reminds us that we systematically under-value what cannot be measured. When we over-estimate our understanding of interdependent systems, there’s likely to be major “blowback.”

The result was Waldersterben, AKA forest death. If your goal is to “deliver the greatest possible constant volume of wood,” forest death is, speaking technically, no bueno. Muy no bueno.

David: What aspect of marketing is under-explored and intriguing to you?

Taylor: Narratives and memes. I think one of the downsides of digital marketing has been its “legibilization” and quantification.

Since we are now able to measure so many parts of marketing with such precision, it’s easy to lose sight of the bigger picture. Really good marketers certainly use and leverage data, but they see it as a piece inside a broader narrative framework. In an interview, Clay Collins explained how his company, Leadpages, was able to do this.

One thing they did was that they used their own software, which lets you easily set up highly converting landing pages, to set-up highly converting landing pages for their own incoming leads. This sort of “meta-marketing” can be very powerful but hard to quantify.

Clay shifted to a model where he released features every 1-2 weeks. Then, he wrote a blog post about each feature. This created a narrative around constant progress and product improvement that you don’t get if you just do two big software updates each year.

David: One of the things that excites me about the cryptocurrency world is that I see Naked Brands everywhere, from a16z, to Union Square Ventures, to Blockstack, to Blocktower Capital. Why are Naked Brands so common in the cryptocurrency world? What does the crypto-sphere have to say about marketing in the internet age?

Taylor: To your first question, I think it’s a trust thing. The cryptocurrency scene grew out of the cypherpunk and open source software movements both of which had a deep distrust of big institutions so it’s important to be “open source” in the space.

One big shift that crypto will bring to marketing is that it will invert sales and marketing. Sales and marketing arose after we left the feudal era where everything was made locally and you personally knew everyone that made things you needed.

We centralized production and so advertising and sales arose to get inform people outside your social reach that your product existed.

Today the asset tries to find the business. On the blockchain, the business will try to find the asset. Sales and marketing will become more like vendor asset management. This started on the internet already with what is called “inbound marketing.” Because it was possible for everyone to start a publishing business (e.g. blog, Twitter, Youtube), it was possible to post things relevant to your audience and they would ask to business with you. Historically, all marketing was “outbound,” you had to pay publishing companies (e.g. TV, radio, newspaper) to  “interrupt” readers with an ad for your business. The blockchain will extend the inbound paradigm but with even better discovery, transparency, and visibility.

You post what product, service or “job to be done” you need on the blockchain what you need and others will offer it to you. You’ll still need experts to explain how the pieces fit together but overall efficiency increases because you dramatically reduce the investment in failed sales and marketing efforts.

For example, let’s say you’re driving on the interstate and need to get gas in the next fifty miles. You could post how much gas you are going to buy and how far away from the interstate you are willing to drive and all the gas stations along the interstate would bid for your business.

In the shorter term, I think there is a big move from more “command and control” marketing to community marketing. If you think about the most successful crypto projects, the people marketing them aren’t doing the marketing themselves so much as creating the right environment and incentives for others to do the marketing for them in a way that is also self-interested. This is a nearly complete inversion from the Mad Men days.

David: Of all the things you’ve ever written, this might be my favorite sentence: “There were more college graduates during the period from 2000-2010 than all graduates combined from the beginning of history to 2000. Paradoxically, students are paying more and more for formal education as academic degrees become commoditized. College graduates have become less and less scarce.” If college degrees are becoming less scarce, how should people think about marketing and differentiating themselves?

Taylor: As it relates to degrees, I think it’s a simple supply and demand function. Historically, degrees were valuable because demand was high and supply was low.

By historical standards, the supply of college degrees today is high and getting higher. Demand is low and getting lower. That’s how anything becomes a commodity. There is a strong cultural narrative behind why college is worth it at any price so that even as it becomes more commoditized and less valuable, the cost continues to climb.

So you have to figure out how to get “credentials” – launching projects, sharing your ideas and having a portfolio – which are in high demand but in low supply.

Naval Ravikant had a great bit on this phenomenon: “Specific knowledge is knowledge that formal training won’t give you. If society can train you, it can train someone else, and replace you. Specific knowledge is found by pursuing your genuine curiosity and passion rather than whatever is hot right now… Building specific knowledge will feel like play to you but will look like work to others. When specific knowledge is taught, it’s through apprenticeships, not schools. Specific knowledge is often highly technical or creative. It cannot be outsourced or automated.”

For example, if instead of going to college for a year, you taught yourself python and launched a functioning web app and got a few customers for it, that would be super impressive. It would be pretty easy to get a job because there aren’t that many people that have the intelligence and self-starter-ness to do something like that.

David: Great, thanks for all these ideas, Taylor.

Taylor: Yep, thank you. This was fun.

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Note: You can keep up with the series by subscribing to my “Monday Musings” newsletter.

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Footnotes

There’s also a certain level of short-termism that many digital marketers are thrown into. Too many are maximizing easily measurable short term-results and not thinking enough about building leverage, creating content that lasts and maximizing serendipity. Patrick O’Shaughnessy’s podcast is a much, much better marketing strategy than your average D2C brand but Patrick’s strategy is much less legible.

On the internet, the best brands:

1) Educate and entertain 💡

2) Operate with transparency 🎤

3) Are people driven 👨‍👩‍👦‍👦

4) Encourage fast feedback 📲

5) Prize on-going communication with fans and customers 🎙️@patrick_oshag sums it up PERFECTLY.

💯 pic.twitter.com/ZR2iivWofW

— ᴅᴀᴠɪᴅ ᴘᴇʀᴇʟʟ ✌ (@david_perell) July 19, 2018

I’m in San Sebastián, Spain, but I could really be anywhere. I’ve flown halfway across the world, but from inside this coffee shop, I can’t tell what country I’m in.

They say that travel allows you to see different ways of living, but that’s definitely not what I’m doing. As I drink this latte, I might as well be back in New York.

All around, I’m struck by disappearing diversity. The world is becoming optimized for the dominant aesthetic of the internet. I swear: every trendy, optimized-for-algorithms place has the same lights, the same chairs, and the same damn avocado toast.

In some way, generic styles are nothing new. Hotel brands promise a consistent, yet sterile, customer experience no matter where you are. Walk into a Hilton or a Holiday Inn and you know what you’re going to get. The clerk at the check-in counter will speak English and there will be a rotating waffle maker at the continental breakfast. Airports and shopping malls are similarly predictable.

The issue is this: hotel visitors know they’re getting something generic. That’s the point. Mid-tier hotels advertise safety and reliability. They sell risk minimization, not experience maximization. Algorithms, though, advertise authenticity while selling commodities. Algorithms trick us into thinking we’re getting real and authentic experiences, when in fact, we’re getting the opposite.

In the internet age, feedback loops move quickly between the real world, Instagram and back again. Once-hidden restaurants, featured on Anthony Bourdain’s Parts Unknown, are now well-known and commercialized. Retail stores and sightseeing tours are impacted as much as restaurants. Ready-to-purchase, authentic experiences only exist for a short time. This drives an eternal commercial loop: At first, authentic travel experiences such as tours and cooking classes are too expensive to buy. As they gain popularity, they become standardized and mass-produced. As their price drops and these experiences lose their authenticity, artisans arrive with niche, personality-driven products, which kickstarts this commercial loop all over again.

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A Push Towards Algorithms

As I reflect on recent trips to Spain, Australia, and Mexico, I can’t help but think how little the best parts of travel have been changed by technology. In fact, the best parts of travel are precisely the things that technology cannot touch.

One caveat: Avoiding algorithms doesn’t apply to traveling in beautiful places. I depend on algorithms in expansive natural parks. When I’m in Patagonia, I want to do the best hike. In Alaska, I was to see the prettiest glacier. The focus is on nature, not people. Depending on algorithms, however, doesn’t work as well in cities, where culture is more important than geography. City travel works best when we put down our phones, seek serendipity, and lean into another culture.

Distinct, foreign experiences in cities — which evolve around people —cannot be bought or sold.¹ They can’t be found in guidebooks and you’ll find no reviews on Yelp. More, as I scroll down these algorithmic websites, I find bland experience after bland experience. When we rely too much on algorithms, we travel around the world and end up with the same experiences we’d find in our backyard.

To be sure, authentic experiences don’t have to be scarce. The participation of others doesn’t necessarily dilute an experience. In fact, large groups can enhance an experience. Certain elements of culture come out only in the context of large groups. For example, no matter where I am, I always try to attend a sporting event. Sports are an excellent window into another culture. In Spain, I attended a bullfight. In Australia, a cricket match. I shared both experiences with thousands of people. I also recommend festivals, street fairs, and local food markets. The higher the ratio of locals to tourists, the better.

As tourism increases, I wonder if we’re actually traveling less. To travel is to escape familiarity and learn into the head-scratching quirks of another culture.

Dan Wang said it best:

“We’re all traveling to more places now, but I wonder if their novelty is limited by our tendency to travel to them in all the same ways. We use online booking to find hotels close to the city center, Yelp for restaurants nearby, and grab coffee in cafés that frankly all feel the same at this point.”

Unfortunately, algorithms discourage this kind of culturally rich travel. In turn, they destroy difference and encourage similarly — a “globalized sameness-as-a-service.” As our bodies hop from country to country, our headspace never changes. I worry that we’re going places without actually going at all. Cities are increasingly filled with “AirSpace” style spaces — defined by rustic interiors, sans-serif logos and refurbished industrial lighting — that could easily be in anywhere in the world. They look glamorous but feel empty.

As Kyle Chayka wrote:

“Facebook’s population of monthly active users, all acting and interacting more or less within the same space, learning to see and feel and want the same things…

The connective emotional grid of social media platforms is what drives the impression of AirSpace. If taste is globalized, then the logical endpoint is a world in which aesthetic diversity decreases. It resembles a kind of gentrification: one that happens concurrently across global urban centers. Just as a gentrifying neighborhood starts to look less diverse as buildings are renovated and storefronts replaced, so economically similar urban areas around the world might increasingly resemble each other and become interchangeable.”

The phenomenon now extends beyond hotels and restaurants. “Things to Do” such as tours and excursions  —  geared towards the incentives of algorithms  —  have met the same fate. By disconnecting from its geography and making everything as average as possible, AirSpace is the antithesis of travel.

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Why Do I Travel?

I see travel as a method of learning. It’s an investment. I rarely travel for leisure, recreation or relaxation. I understand why people do it, but at this time in my life, that’s not where my priorities lie. Planning and paying for travel is a big investment in energy, money and time. The opportunity cost of travel is large, so the long- term returns must be worth it. Besides, it’s cheaper and more convenient to have fun in my home town.

As Vitalik Buterin observed:

“I think going to Beijing and seeing the Summer Palace, and then going to Tokyo and seeing some shrine and whatever, is basically useless because you don’t really get more than you would get by going to Wikipedia. But I think the kind of traveling that is valuable is the kind where it’s not even set up as explicit travel for the sake of travel. You’re traveling there in order to do something, and in the course of doing that, you end up interacting with people. You end up seeing what the different aspects of the culture look like. You end up seeing how people think, how people interact with each other.

Is there something that they’re doing that’s better than what you’re used to? Are there things they’re doing that you can really say are worse than what you’re used to?

I personally definitely learned a lot of that from, say, going to China, and Asia in general, that I would not have learned by just reading about those places from the internet and the various mainstream ideological blab houses that talk about those places all day long.”

In summary, if you want to learn about the Eiffel Tower or the Golden Gate Bridge, it may be better to pick up your smartphone, open up Wikipedia, and save yourself the expense.

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The Algorithmic Paradox

Call me old-fashioned, but the more I travel, the less I depend on algorithms. In a world obsessed with efficiency, I find myself adding friction to my travel experience. I’ve shifted away from digital recommendations, and towards human ones.

For all the buzz about landmarks and sightseeing, I find that immersive, local experiences reveal the surprising, culturally-specific ways of living and thinking that make travel educational. We over-rate the importance of visiting the best-places and under-rate the importance of connecting with the best people. If you want to learn about a culture, nothing beats personalized time with a passionate local who can share the magic of their culture with you.

There’s one problem with this strategy: this kind of travel doesn’t scale. It’s inefficient and doesn’t conform to the 80/20 rule. It’s unpredictable and things could go wrong.

Travel  —  when done right  —  is challenging. Like all face-to-face interaction, it’s inefficient. The fact that an experience can’t be found in a guidebook is precisely what makes it so special. Sure, a little tip helps — go here, go there; eat here, eat there; stay here, stay there — but at the end of the day, the great pleasures of travel are precisely what you can’t find on Yelp.

Algorithms are great at giving you something you like, but terrible at giving you something you love. Worse, by promoting familiarity, algorithms punish culture.

Here in San Sebastián, the best pintxo bars are the dirtiest ones. They have tons of napkins on the ground. The more napkins, the better the food. Locals depend on this unspoken rule-of-thumb. A floor full of napkins signifies tasty, local food but a terrible Yelp review.

In New York, where I live, the issue is most acute with speakeasies. Traditionally, these once-secret-bars could only be discovered through word-of-mouth. They were hidden in basements and behind secret doors. On the internet, speakeasies receive prime algorithmic real-estate. They are no longer secret. With such prime visibility, they might as well be located in the middle of Times Square. Strikingly, the same traits that would have made a place obscure in the 1980s make it a popular, line-out-the-door draw in 2018.

In contrast, this tip-top-rated, hyper-perfect coffee shop is sterile. It has no personality. There’s nothing local about it and the food Instagrams better than it tastes. Optimized for algorithms, it rewards cleanliness at the expense of interestingness. Drop somebody in here and they won’t know if they’re in Shanghai, San Francisco or San Sebastián — the opposite of what you want as a traveler.

And yet, this coffee shop is packed. Here, you’ll find nothing but trend-hungry foreigners in search of familiarity and a neon-lit stage for their next Instagram post. When we follow algorithms, we simultaneously increase the likelihood of a good experience while decreasing the potential for a great one. It’s a trap. Trust algorithms too much and you’ll find that you’ve been somewhere without ever having actually been there.

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It’s the People That Count

Travel should be driven by curiosity, wonder and serendipity. Fueled by the energy of excitement and spontaneity, the best travel experiences can exist only once at a single moment in time. When I speak with locals, I’m blown away by the unexpectedness of what I see and learn about their philosophy of life. Each one has a different way of interacting with their hometown. Their stories always surprise me. Better yet, their recommendations are always interesting.

Why?

Well, I have a theory: Human interaction is its own kind of biological algorithm.² The people we connect with tend to mirror our values, tastes, and interests. Since human connection is such a strong signal, travelers should pursue more of it. Build enough camaraderie, and the locals you meet will recommend peculiar, off-the-beaten-path experiences.³

Each place, from Sydney to Mexico City, is much more different than what mass-produced experiences would lead you to believe. As you escape the restrictive world of algorithms and journey to the expansive world of human interaction, this reality will hit you like a freight train.

What have I learned about traveling in the internet age?

Traveling in cities is like a trip to the Louvre. Algorithms will recommend the Mona Lisa. It’s the best and most famous painting there. “You can’t miss it.” Here’s the problem: According to the director of the Louvre, 80% of the visitors are there just to see the Mona Lisa. Many visitors ignore the other world-class paintings right down the hall. With the right guide, these other paintings are equally rich and more enjoyable to see.

I’m definitely not against using the internet.⁴ I simply try to avoid algorithms — especially for restaurants and travel tours. For restaurants, I always ask for recommendations and follow the fail-proof guide of passionate responses.⁵ If someone’s face lights up as they describe a restaurant, go there. If it’s an experience, do it.

When I do book a tour through an algorithm, I demand a small group. If I can’t speak directly to the host or tour guide, I’m not doing it. Simple as that. Big tours — the ones you usually find at the top of travel algorithms — are great for sightseeing but the tour is experienced with other tourists, not locals. Big tours transport people to a checklist of places in the most bland, impersonal way.⁶ By catering to the lowest common denominator, they neuter all potential for a true cultural experience. Mass-produced tours are like a facade —they allow us to see a place at the expense of feeling it. But when it comes to culture, we should focus more on feeling a place and less on seeing it.⁷

It’s impossible to appreciate the depth of another culture without activating all five senses —hear, see, smell, taste, and touch.

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Personal Guidelines

I want memorable experiences but know they cannot be forced. I want a reliable, easy-to-execute system but know that such a system will destroy the very serendipity that gives travel its flavor. Nevertheless, I can’t help but create a system. It’s what I do.

Ultimately, my philosophy of travel boils down to this: When possible, avoid algorithms. Meet passionate locals who can communicate their passions well. Then, follow their lead.⁷ Do what they do, go where they go, and ask lots and lots of questions. If you find yourself saying “that’s weird” then you know you’re in the right place.

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Footnotes

¹ There are exceptions to this. But mostly at high price points. Sky-diving and high-end dining are exhilarating and likely to be recommended by an algorithm.

Parts Unknown is a striking example of how algorithms shape real-world geography. On Season 8, Anthony Bourdain and Barack Obama slurped noodles together in Hanoi, Vietnam. Before the episode, the restaurant was just a local spot. It was not a popular tourist destination. Now, that’s changed. The restaurant (called Bún Chả Hương Liên) has a museum-like table inside a glass structure to commemorate Bourdain’s meal with Obama. Thanks to Web Barr for this excellent observation.

² In Mexico City, a colleague recommended her favorite high-end restaurant, where I dined at alone. The reviews were good, not great. A recommendation from a friend was the exact push I needed to walk into a crowded, high-end restaurant. “Table for one, please.” Fueled by personal recommendation, this was no time to be timid. I walked to my seat with a big, confident smile on my face and sat down. It was time for serendipity. Seconds after I sat down, I struck up a long conversation with the waiter who ignored protocol and gave me a one-on-one masterclass in the tortilla textures and the complexities of salsa. After building rapport with him, I asked him to order his favorite foods on my behalf. The meal he delivered tasted better than anything I would have found on Yelp.

³ In Sydney, Australia I met a food writer named Jono who took a few days off work to take me to his favorite local restaurants. Jono’s recommendations would have flopped on Yelp. I would have never found them on my own. Jono took me to a coffee shop made of recycled shipping containers and a hole-in-the-wall Thai restaurant which bordered a large row of projects that my intuitive compass would have avoided. And yet, the experience of being led by a local is unquenchable. The best insights from traveling come from the window they hold into their life and the mirror they hold onto yours. No matter where I am, I seek local connection.

⁴ In particular, I love one-person blogs. All my travels begin with a search on Marginal Revolution, a blog written by Tyler Cowen and Alex Tabarrok. I read through the posts that relate to where I’m visiting. If if I find a local blog I like, I always reach out to the writer for lunch or personal recommendations.

⁵ Once again, these rules don’t apply for high-end restaurants. These are general rules but since the world is so vast, there are always exceptions.

⁶ As a general rule, the smaller the tour, the more culture there will be. Only in small tours do we find ourselves shaking our heads and saying “Hmmmm… that’s interesting!”

⁷ Safety obviously matters here. Be smart. But remember, safety and comfort are very different. Seek discomfort and don’t conflate the two.

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Acknowledgements

Thanks to Zander Nethercutt, Drew Austin, Alex Hardy, and Web Barr for their feedback on this post.

Naked Brands are a new kind of brand — enabled by social media, powered by personality, and built for the digital age: 

1. Naked Brands are transparent.

2. Naked Brands are founded by social media influencers.

3. Naked Brands prize on-going communication with fans and customers.

Since writing the original Naked Brands post, I’ve applied the concept to finance, fashion, music, and basketball. Now, I’m writing a book about Naked Brands. 

This book project requires an extensive research process. I plan to conduct many interviews with writers, influencers, and entrepreneurs. The interviews will all be public and will live right here on my website. We’ll go on this journey together — you and me. Together, we’ll cross industries, speak with experts around the world, and explore the past, present, and future of Naked Brands.

If you have ideas or feedback, please send them my way. You can find my contact information here. I look forward to hearing from you.

Note: You can keep up with the series by subscribing to my “Monday Musings” newsletter.

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Eric Jorgenson

My guest today is Eric Jorgenson. Eric Jorgenson is the Director of Growth at Zaarly and is building Evergreen Library, which I highly recommend. He’s a curator and an author who writes about startups, operating and decision-making.

Eric the author of a short new book called Career Advice for Uniquely Ambitious People. His forthcoming book is The Almanack of Naval Ravikant. 

A cheeseburger connoisseur, Eric is on a 50-year mission to build the world’s best business education system.

You can follow Eric on Twitter here.

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David: Who is your favorite Naked Brand and why does it stand out to you?

Eric: I’m not sure this fits your exact criteria of a Naked Brand, but I think Elon Musk is very interesting to look at through this lens. Across many companies (Tesla, SpaceX, Boring Company, SolarCity, HyperLoop, Neuralink) he is able to will ideas into existence and almost immediately create an interested, loyal following for the idea.

He’s engaging directly with people on Twitter. He tweets announcements rather than creating press releases. His communications are informal, full of personal humor and inside jokes. He is infusing his companies with his personality. The scale of the companies, the audacity of the vision, and the lighthearted whimsy of the marketing create an incredibly fun thing to be a part of.

Another tactic from Elon that will certainly go in the Naked Brands Playbook is using Wait But Why as a storyteller of his brands. He saw a huge overlap in audience between his followers and Wait But Why, then recognized and leveraged Tim Urban’s unique genius as a teacher and entertainer.

The power of this move comes from two different aspects: audience expansion and third-party validation. By putting yourself in front of an audience with overlapping interests, you will naturally gain some of those as new fans and followers. Third-party validation is key because you need to build credibility with your audience. People get tired of hearing YOU talk about how great you are — find someone ELSE to talk about how great you are. Third parties are easier to believe and they create more trust.

David: In a post called Advertising: Misunderstood, Underestimated, and Neglected Genius of Advertising, you wrote about the basic building blocks of stories. How can influencers use these techniques to tell their story in a way that’s short-term catchy and long-term sticky?

Eric: I love the framing of “short-term catchy” and “long-term sticky” — and there are two very different answers.

Short-term catchy comes from causing a pattern-interrupt in your audience. A pattern-interrupt should be a surprise or small shock — enough to get someone to stop their deadpan scrolling and get their eyes to widen or jaw to drop. Something different that causes them to give you enough attention to make a memorable impression. That could come from a unique medium, like Richard Branson driving a tank into Time Square. It could also come from a shockingly precise match with your audience’s desires. (Like our “cooking for bodybuilders” example.) You want the reaction of “oh my god that’s exactly what I’ve been looking for.

Long-term sticky I think can only come from an engaging story. The brand tells a story that its fans are invested in. You have to find your quest, define your enemy, assemble your team, and keep your audience in suspense. Involve your customers in the narrative as a supporting cast. There is an entire Evergreen post dedicated to Storytelling — I was fascinated by how much structure there is to stories. It always seemed so mystical, but the story is formulaic and can be engineered. Learning to build stories and engage audiences with them will be a key tool for Naked Brands. (Study top YouTubers for great practical examples of this.)

One remarkably successful example here is graffiti artist Banksy. Each of his pieces are short-term catchy, because of the medium (illegal street art), and are often giant, eye-catching pattern interruptions. And his long-term stickiness comes from the ongoing story — his worldview and commentary as an artist are reinforced and expanded with each piece, and the ongoing mystery of his identity keeps fans curious.

David: Many startups believe that advertising is proof of weakness in the product or distribution strategy. But Naked Brands are essentially marketing companies first and product companies second. What gives?

Eric: The startup world tends to start with the product idea. People believe they are building products that are so innovative and compelling that they don’t require marketing or sales. (This is rarely true.) But that is the mythology people believe, so marketing tends to be an afterthought. In the valley, companies emerge from products or technological innovations.

In comparison, Naked Brands are companies that emerge from audiences. People build a following by sharing something they are interested in or skilled at (art, bodybuilding, writing, cooking, etc.) and find that they have an interested audience. Then, they observe (or create) demand for products and services to sell into that audience.

Companies can evolve from very different starting places, different initial assets. It’s very interesting to see how that leads into their strategies and eventual fates.

David: You are active on Twitter, where people have grown businesses through entertainment and education. What are the essential ingredients of their success?

Eric: They are successful because they are 1) Authentic and 2) Niche.

“Authentic” is a bit of an overused term in marketing and social media, but it is especially critical for Naked Brands. This is because in an environment where transparency is a must, people have to feel enough substance and expertise to respect the authority of the person behind the brand.

“Niche” is important because this is where the most dedicated and sustainable audiences are built. If we use the mental model of evolution, a business wants to carve out a unique environment where it’s specializations allow it to thrive and grow. Often this starts smaller than anyone expects. If I am interested in learning to cook, I have a lot of competing options. If I want to learn to cook and I’m on a very specific kind of diet because I’m also a bodybuilder, when I find someone who does “cooking for bodybuilders” they will own my attention and my business.

Shane Parrish of Farnam Street is a great example of both of these attributes.

Shane has incredibly deep fluency in the topics that he’s writing about, and he’s a world-class curator. It’s only possible for him to be so good because it is his lifelong passion to study these topics. I trust his taste explicitly, and I respect every opinion and recommendation. He is authentic.

Farnam Street serves a niche audience (or a few niches now, as they’ve grown.) It is a bookish audience who is probably already reading Munger, Buffett, and Taleb. They create content and experiences for teaching decision-making, strategy, innovation, etc. The audience is mostly executives, investors, and founders.

David: You recently published a book called Career Advice for Uniquely Ambitious People. In a world where people are businesses, how does marketing apply to the future of careers?

Eric: The same rules that apply to successful Naked Brands should be observed by anyone building a career: 1) Authentic, 2) Niche. It goes without listing that you also have to be good at what you’re doing.

One of the chapters in my mini-book is about Specializing — creating your niche. Keep improving yourself AND redefining what you do until you are the best at something. (And that could mean becoming an incredible generalist by overlapping a few different skills.)

These are, not coincidentally, some of the core principles of marketing. In “The 22 Immutable Rules of Marketing”, the first ones are about “Creating a Category” and “Leading the Category.” Find your niche, then dominate it. Expect to iterate multiple times on the way to both.

In career-stage terms, there are two distinct phases we alternate between throughout our careers: “Explore” and “Exploit.” Find your niche, dominate it. Redefine your niche, dominate that. Repeat.

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Note: You can keep up with the series by subscribing to my “Monday Musings” newsletter.

I was wrong about Mexico City. 

Mexico City isn’t as dangerous as it once was. The food is tasty and the museums are excellent, so you’re an art and culture lover, you’ll have plenty to do. Mexico City is becoming a traveler’s paradise.

When I travel, I always try to meet adventurous, intellectually curious people. When I do, I ask them to take me to their favorite places. As for the food or the activities, I have no preference. I only ask for a local experience and to avoid tourist traps. I eschew plans in favor of serendipity. Then, I surrender to their recommendations and follow their lead. That’s exactly what I did in Mexico City.

After a day full of meetings and a Naked Brands workshop, Lourdes Garcia, a Mexico City native offered to show me around her hometown. A photographer, Lourdes has an eye like Zaha Hadid and a taste for contemporary art that would’ve inspired Andy Warhol. 

I’ve long held a deep, deep affection for Latin America. From Chile to Costa Rica to Panama, Latin people always seems to radiate with warm hospitality. Like the rolling R’s which vibrate off Latin tongues, my pulse always beats a little faster as I venture South. My smile, a hair wider as I inch towards the equator, communicates what my Spanish cannot.

In fact, the beat of my heart in Mexico City reminded me of what I’ve always known: while the spoken language couldn’t have been more foreign, the body language couldn’t have been more familiar. No matter what our color, creed, or race, all of us are fluent in human emotion. 

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Mexico City Background

Mexico City is big. No, like really big. Once the capital of the Aztec Empire, Mexico City is the largest city in North America. 

Mexico City is an economic powerhouse. According to a recent study, Mexico City has a GDP of $390 billion, ranking it as the eight wealthiest city in the world and the richest in Latin America. The city alone would rank as the 30th largest economy in the world. National wealth is concentrated in Mexico City.¹

Mexico City stretches for miles and miles. The outer edges extend past the limits of the eye — as wide as the eye is long — as if you’re standing at the edge of the Pacific Ocean and looking for Asia. 

At almost 8,000 feet, Mexico City has a bizarre climate. On rainy summer afternoons, the clouds hug the city as if they’re leaning in to kiss the pastel-colored architecture. They swoop in for a taste of warm tortillas, fresh-off-the-comal, topped with zesty, sweat-inducing salsa. Perched atop a volcanic plateau, the summer rains arrive every evening, right at 6pm, with the precision of a Swiss train.

Naked Brands are a new kind of brand — enabled by social media, powered by personality, and built for the digital age: 

1. Naked Brands are transparent.

2. Naked Brands are founded by social media influencers.

3. Naked Brands prize on-going communication with fans and customers.

Since writing the original Naked Brands post, I’ve applied the concept to finance, fashion, music, and basketball. Now, I’m writing a book about Naked Brands. 

This book project requires an extensive research process. I plan to conduct many interviews with writers, influencers, and entrepreneurs. The interviews will all be public and will live right here on my website. We’ll go on this journey together — you and me. Together, we’ll cross industries, speak with experts around the world, and explore the past, present, and future of Naked Brands.

If you have ideas or feedback, please send them my way. You can find my contact information here. I look forward to hearing from you.

I’m kicking off the Naked Brands interview series with one of my favorite writers, Morgan Housel. Morgan is a partner at Collaborative Fund, a brilliant writer, and as I learned first hand, an excellent podcast guest!

In this interview, Morgan and I discuss how the internet shapes consumer values, the power of shows like Chef’s Table, the sudden rise of Vanguard, under-reported insights from Warren Buffett and Howard Marks, and the ideas that drive Morgan’s writing. 

You can keep up with the series by subscribing to my “Monday Musings” newsletter.

Thank you for reading!

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David: Morgan, thanks for coming on the Naked Brands Interview Series. 

I love what you’ve said about the importance of building trust and values in the internet age. How do you see this shifting between the Millennial generation and people like me who are internet natives?

Morgan: Yeah, I would say I would say a big trend started with my generation, which is that we more or less grew up with access to a lot of information. An order of magnitude more information than my parents. I think if you go back a couple hundred years, every generation has had marginally more information than the generation that came before them, whether that was starting with books, and then telegrams, and then widespread newspapers, and telephone, and TV, and radio, on and on and on.

But then information access took a quantum leap with the internet. I more or less grew up with the Internet. I started using the internet when I was an early teenager at pretty much the same time that I started using computers. I grew up with the idea that information is out there if you look for it and that information should be free and readily available. That expectation represents a big shift between people like me and baby boomers like my parents.

Internet natives like yourself also grew up with the internet, but it was an order of magnitude better than it was when I grew up. So you probably have even more of a sense of (a) that information is out there if you look for it and (b) if it’s not out there, like if a company is trying to hide it from you, that in itself said something.

So I think it’s just how we’ve grown up and the expectations that we have open access to Internet that has been this paradigm change. And companies that get that, it’s not necessarily that they are more open and transparent with their data, although that is a point. It’s more along the lines of companies now realize that you can’t get away with misbehavior like you used to in an era when information was hidden, so brands now know that customers really care about how they treat their employees, how they treat their suppliers, what their products are made of, and where those ingredients or resources are sourced from.

Stuff that has always been important, I truly think it’s an order of magnitude more important now than it used to be. I’ll give you an example of that.

Vanguard was started in 1975. Vanguard more or less plotted along slowly for another 20 years, and by the 1990s, Vanguard had several billion dollars in assets under management. But it was not a game changer in the slightest until about 15 years ago. And then it just went exponential. Vanguard just took off. Even if you’re looking at it like a chart, like in log form, like 15 years ago, something just clicked and all of a sudden more money to started flowing into Vanguard.

David: How do you explain the sudden rise of Vanguard? 

Morgan: It wasn’t like Vanguard was a new startup and as soon as it was on the scene people like, oh, this is great. Vanguard had a quarter of a century of people who were like “oh yeah that’s interesting but I’m happy in my mutual fund over here.” And I think to answer that question, why did that happen is really complicated. It’s not just like one thing that happened. But something I think a lot about is that the average investor just has so much more access to information and commentary and being able to talk to other investors and compare fees than they did 25 years ago and as soon as the ability to compare fees, talk with other investors. You have people on the Internet like Josh Brown and Barry Ritholtz, that are sharing information and telling you what to do. As soon as that open access to information happened, people were like, “I don’t want this mutual fund. I want Vanguard.”

And it was just like boom, trillions of dollars flowing in that direction. Now of course, I think there are many other variables in that story, but I think that is a big part of it.

David: You know, with Naked Brands, one thing that is so critical to this emerging trend is that people are essentially media companies now. Look at yourself. In the past year and a half, Collaborative Fund has gone put its name on the map and now if feels like everybody knows about the firm. Among people who know Collaborative Fund, it’s crazy how many people find it through your writing and through podcasts like the one we recorded together. How do you think about brand building and how do you think about being a quasi-media company and the importance of people like yourself?

Morgan: It was Patrick O’Shaughnessy who said this, who by the way is another great example of someone who’s following the Naked Brands ideas in a really effective way, but Patrick O’Shaughnessy said, you know the TV series Chef’s Table?

David: Yep. Good show.

Morgan: Well, as you know, the show takes you behind the scenes. Usually, as a restaurant goer, all you ever see is the plate brought out to your table. But on Chef’s Table restaurants show you what happens before the food comes to the table. They show you how they source their food and how they make it. That’s what content is doing for the asset management business, and you can extend this to many other businesses as well. So many people have always had access to the product. What is the mutual fund? What are the returns?

On the internet, the best brands:

1) Educate and entertain 💡

2) Operate with transparency 🎤

3) Are people driven 👨‍👩‍👦‍👦

4) Encourage fast feedback 📲

5) Prize on-going communication with fans and customers 🎙️@patrick_oshag sums it up PERFECTLY.

💯 pic.twitter.com/ZR2iivWofW

— ᴅᴀᴠɪᴅ ᴘᴇʀᴇʟʟ ✌ (@david_perell) July 19, 2018

Blogging is like a step behind the scenes. Here’s how I think. Here’s what I think about the world. Here is our process internally. Here’s how we talk to each other internally. Here’s how we debate each other. Here’s what I think versus what this person thinks. Blogging is like the Chef’s Table of asset management. And firms like Ritholtz Wealth Management and O’Shaughnessy Asset Management are selling trust in an oblique way that people don’t realize.

Josh Brown is blogging every day, and if you read Michael Batnick, Barry Ritholtz, Ben Carlson, and Nick Maggiulli, you start forming a subconscious trust with them that you wouldn’t have through other advisors. And there are others in the asset management business that are doing it too.

But that’s always been the idea behind news anchors and sports broadcasters and what not. You know, the reason that Walter Cronkite or Tom Brokaw became trusted people is because you felt like you got to know them personally over time.

Walter Cronkite was like everyone’s grandpa in the 1960 and people just trusted him. And I think that’s, that’s like the very early days of what more people are doing these days with blogs. But the big difference, of course, is that there was only one Walter Cronkite, whereas now there are dozens if not hundreds of respected finance bloggers. So it’s the same thing that people have always been doing but it’s way more scalable today.

David: What do you think it is about finance in particular that has made the Financial Twitter and blogging community thrive?

Morgan: I think money is just inherently very emotional. More so than many other topics. Like there could never be an active Twitter community around changing your oil, even though that’s like a multi-billion dollar industry. Or like orthodontics, It just wouldn’t happen because those are not emotional topics. Those are topics that are very important and those are both multibillion-dollar industries but there’s no emotion attached to them

Whereas with Financial Twitter, I mean, the center of all investing is uncertainty. That’s like the center of gravity that keeps all of this together is that we don’t know what’s going to happen next and that’s one element. And then the second element is huge stakes. People’s retirements and people’s children’s educations and their life savings are on the line here. So you combine uncertainty with huge stakes and people are just going to get really emotional about what’s going on.

Pretty much the definition of a market is people disagreeing with each other. I’m buying and you’re selling, and maybe we don’t necessarily disagree. Maybe I’m young and you’re old and the transaction makes sense, but the heart of most markets is that people disagree. I think this company is going to do well and you think it’s gonna do really poorly and like, great. There’s a buyer and a seller right there. But it also means that people just get really, really antagonized over over other people’s views online. If you think hyperinflation is coming and I think interest rates are gonna fall, those are diametrically opposed views and so so it’s natural that people want to debate each other.

And since most people in the Financial Twitter community are well educated, high-income people that don’t have a lot of material adversity in their life, this is our tribal warfare. Three hundred years ago we all would have been chasing each other with swords and like chasing each other out of each other’s villages. Now we just go on Twitter and this is how we scratch that itch of tribal warfare with each other.

David: Hahahaha! That’s hilarious. Why engage in a sword fight when you can bicker about the future of passive vs. active investing on Twitter? Ok, I have to ask. What flipped the switch from full-on informational secrecy to people like Warren Buffett and Howard Marks writing letters to then, the floodgates opening now?

Morgan: I think Buffett and Marks were really the forerunners for all of this. They were not just giving their investors more information, but they were using their ability to communicate as a bridge towards trust. And that’s really what it was. So many investors will say “Oh I went back and read Warren Buffet’s letters to shareholders and they’re so enlightening.”

I think, for the most part, there’s actually not that much technical information in there that most people didn’t already know.  If you have a finance background, you understand a free cash flow and value and margin of safety. You get all of that. But Buffett’s letters instilled the sense of like subconscious trust. The way Buffett describes things gives you this view of: “Hey, you’re not trying to screw me. You’re not just like a stockbroker out there who’s trying to skim something off the top. You’re really doing this in a way that makes sense and in a way in which our values are aligned.”

I think Howard Marks did the exact same thing. I don’t even know if they did that on purpose. I think that is just an enduring part of both of their personalities that came out through their writing.

And while I’m on a side note, why have Buffett and Marks been successful? There are a lot of reasons. They’re really smart people and they’ve been investing during a great era, but also they more or less had permanent capital because their investors trusted them. And because of that trust, all these other hedge fund managers and private equity managers that during a bear market, their investors would have said, “I don’t trust you anymore. I’m out of here. Give me my money back.”

But investors didn’t do that for Buffett and they didn’t do that for Marks, and that’s a massive competitive advantage right there. So put all that together. Buffett and Marks used content to instill trust, trust gave them permanent capital, and permanent capital gave them a massive financial advantage over other investors.

That I think is probably an underreported story of Buffett. That is, how much his ability to do what he does depends on his ability to take a 20-year view and have cash available to deploy during downturns like 2008 and 2009. All of that is just stemmed from his ability to have permanent capital, which is a function of investors trusting him for the last 50 years.

David: That’s really interesting. As you were speaking, I was reminded of a recent conversation that I had. I was interviewing a brilliant writer for my podcast recently and he said something that I can’t stop thinking about. He said that as quality increases and ceases to be a differentiating factor between products, companies increasingly begin to sell identity. And he said that this is happening with religion. He said that religions which require a lot of commitment such as Mormonism are becoming more popular, in part because there aren’t as many free riders and I don’t know if that’s true, but it’s a provocative idea and I can’t stop thinking about it.

Morgan: That’s interesting. My intuition would have said exactly the opposite.

David: It’s like so shocking that I still need a little bit more evidence. Anyways, as you think about the intersection of brand and identity, and study the future of brands like Outdoor Voices and Sweetgreen, where do you see identity-driven brands going?

Morgan: It’s not just consumers but also employees and investors who want to be aligned with organizations whose values are the same as their own. It’s just moving away from a work just being a place that you go to get your paycheck or a store as just a place to where you go and buy your food. Instead, people are saying that they want to align themselves with these companies and if they don’t have the same values as them, then that’s not something that they necessarily want to put up with.

I think the best in-your-face example of that in the last two years has been Uber versus Lyft. It’s hard to think of any other product out there where the competitor’s products are as identical as Uber and Lyft.

They’re more identical than Coke or Pepsi or Bud Light and Miller Lite, but Uber and Lyft are exactly the same. It’s usually the exact same drivers that are on both platforms. Even the user experience and design of the two apps looks almost exactly the same. But you have this massive shift in the last two years of customers navigate migrating from Uber towards Lyft. And it’s not a little. It was like 15 percentage points of market share last year driven by the Delete Uber campaign.

As news started leaking out about Uber’s internal culture, I think a lot of people just went, I don’t want to be associated with that. I would rather be associated with this company Lyft over here. Not that Lyft is all rainbows and butterflies. angels. They’re a gritty company as well, but a lot of people were saying, look, this is an identical product. I don’t give up anything from a consumer standpoint. I don’t have to give up any sort of functionality to switch over to Lyft. I’m going to get the same product and I like this company a little bit better. I like their values a little bit more.

That to me was like the perfect example of identity and it’s like you couldn’t have asked for a better example just because the products are identical. It’s not like Chipotle and Taco bell where it’s like I can see how those are the similar industry, but those are very different products. Uber and Lyft are like the perfect science experiment for this and it’s been a massive shift away from Uber towards Lyft.

So that I think this is an example of what’s going to happen more often. Consumers are looking for alternatives and saying, look, these products are more or less alike, but I like this company a little bit more and the companies that realize that that shift is happening will put a lot more emphasis into their brands, not just in their marketing but how they treat their employees, how they work with governments around the world. Just how they put themselves out in the world. And really what it is is aligning all the stakeholders in your organization rather than just your shareholders.

If you just line up all your stakeholders and say, okay, we have employees, we have suppliers, we have the community, we have governments, and we have shareholders too.  We need to make sure that all of those buckets are more or less equally filled, because as soon as one is being filled more than others, as soon as one of those stakeholders is being ignored or taking advantage of, since we have more access to information, that news is going to get out that we’re exploiting them. And then that’s going to be a negative ding on our brand just like it was for Uber, and then over time, people are going to start navigating away from the brand.

David: What changed about the world to make having an identity be a part of a brand so important?

Morgan: I think it’s kind of gets into one of your other ideas about how on social media, people don’t want to follow a company. They want to follow people.

It’s so much easier to fall in love with a person than a company. It’s just so much more natural to love a person. And I think someone like Josh Brown. Even if you don’t know him, you can picture yourself having a beer with him, in a way that you cannot do with Goldman Sachs.

And I think that’s really what it is. But you hit the nail on the head that for a lot of companies, their company’s social media profile is basically just used as customer support. Like “Hey United Airlines, my flight’s delayed, how can I get a refund?”

Whereas you have, you have individuals out there that are really driving the company’s brand. A lot of companies have always done this. Going back to the 1990s, you had Abby Joseph Cohen for Goldman Sachs. People were going on CNBC and she was the public face of Goldman Sachs. I mean she was really big in the 1990s dot-com boom.  And she was a household name in the 1990s. People would come home from work and be like, oh, did you see Abby Joseph Cohen on TV?  She thinks the market’s going to go up 20 percent this year.

So companies have always had that. It used to be people going on TV or going on the Sunday talk shows, and that kind of thing. But it’s just multiple orders of magnitude more scalable now than it was back then.

David: Just look at Kylie Jenner.

Morgan: Right! Why is she so successful doing what she’s done? I think it’s because people look at her and say, I want to be you in a way they obviously cannot do for a company. So it’s not that they look at Kylie Jenner’s lip gloss or whatever she’s selling and say like, oh, that looks great on you. It’s them thinking that would look great on me.

And I think that is an important thing that people can do, that companies cannot. And I think that’s true for investors as well. Like if you hear Michael Batnick talk or Michael Batnick write, I think it’s easy to say I want to invest like you. I want to be able to think like you. I want to be in your court. You cannot do that for Merrill Lynch as a brand. It’s the ability to look in the mirror and say that’s who I want to be and you can do that for a person, but you can’t do it for a company.

David: Totally. I think we both agree that on social media people want to follow people. They don’t want to follow companies, But I do think that in terms of building Naked Brands style companies, there’s a risk there, right? If something happens to a big personality, it will negatively impact the entire company. How would you think about diversification and reducing risk without minimizing your upside for reward?

Morgan: I would say even more likely scenario then you know, someone getting hit by a bus, God forbid, is that most people own their own. They own their personal twitter accounts. Those are not the property of the companies and they can just get up and walk away and join someone else and take that distribution channel with them. And I don’t know if there is a solution for the company other than realizing that people that have brand influence have way more power then companies might think so, and they should treat those employees and compensate them compensate them accordingly.

I think a lot of companies do get that, but a lot of other people might be like, oh, you have some twitter followers, but what does that do for us? How is that? How is that driving our bottom line? What twitter followers have to do with anything? Well, influence and attention are everything. Even though they’re hard to quantify, and may be hard to like directly monetize, they meet a lot, and once that person walks out the door that might be the moment that you realize how powerful that person was.

David: I was talking to Sara Dietschy, who is one of my favorite YouTubers and she said that what she tries to do is to do a combination of educating and entertaining. If there’s too much without the entertainment, people get bored and people don’t watch in their free time. If there’s too much entertainment without education, it is great for a quick dopamine rush, but it doesn’t get people to stick. How do you think about the tradeoff between education and entertainment and what are some of the things that drive your own content creation strategy?

Morgan: This is different for everyone depending on who their target audience is. But for me, I think that most readers just want to think differently and of course, they want to be entertained, but what they really want is just intellectual buzz. At least that’s kind of what I’m going for and it seems kind of like that’s what you’re going for as well.

David: Totally.

Morgan: You’re not trying to make someone laugh and you’re not trying to put a funny video out there. You want their brain to start buzzing a little bit. That’s what you’re going after.

David: Right. I like that.

Morgan: I’ve always thought that there’s a different couple ways of writing. You can give someone information that they didn’t have before, but that’s really difficult to do because companies like Reuters and Bloomberg are going to have better information and deliver it faster than you. The second is to take that information and have an opinion about it. And that’s interesting but it’s not that useful for people. But the third type is the type that I think more people should focus on is changing how people think. Take what information is out there and add context to it. Say, look, this isn’t necessarily my opinion and this is not new information, but here’s what’s going on in the world. Have you thought about it in this different way?

David: Right.

Morgan: And I think if you do that effectively, that is entertaining because it provides intellectual buzz for you. So that’s how I would think about it. It’s not new information and it’s not trying to be funny. It’s just trying to say, hey, here’s something that you already know that you’ve already been thinking about for a long time, but have you thought about it with this lens put over it? Have you thought about it in this context? Have you thought about how Topic A relates to Topic B, which is all intertwined with Topic C? That’s the kind of thing that I think people find “entertaining” at least for the field that we’re in. And that’s what I think about for writing.

David: I think of a post of yours like The Shallow Benefit of Deep Liquidity because before I read that post, I didn’t even have the vocabulary to think through those concepts and that post is like a key to a new kingdom of thinking and a deep well of ideas.

Morgan: That’s cool. Thank you. That’s awesome to hear. Let’s take that post and back up. I didn’t do any primary research for that article. There is no new information un there that’s no available to everybody else. It’s not a funny post, but hopefully just gave you a little bit of intellectual buzz. Like, Hey, I’ve never thought about it this way. That’s cool. That’s how I think about the entertainment versus information tradeoff in articles.

David: Awesome. Well, thank you, Morgan. The Naked Brands interview series is officially underway so thank you for launching it here with me. 

Morgan: Thank you David. This has been fun.

“Your mind will take the shape of what you frequently hold in thought, for the human spirit is colored by such impressions.” – Marcus Aurelius

Creativity moves the world.

Creativity can’t be created directly, but it can be cultivated. As we soak up wisdom and engage in new experiences, the world shifts like fragments of colored glass in a kaleidoscope. As the kaleidoscope shifts, we see infinite varieties of beautiful colors and symmetrical forms. 

We don’t see the universe as it is; we see it as we are. Each species experiences and understands its environment in terms of how it perceives it. Bats respond to sound and sharks to smell. 

Propelled by new knowledge, humans can adjust how they perceive the world. As Alan Kay famously said: “Perspective is worth 80 IQ points.” 

As we change, so does the world, and as the world changes, so do we. The landscape of creative potential is always expanding.

Creativity is born out of this co-evolution between ourselves and the world. Combinatorial possibilities emerge with each new theory or invention. Every now and then, when order emerges out of chaos, creative potential is born. 

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Three B’s of Creativity

It’s impossible to be creative when stuck in your routine.

The best ideas don’t come when you’re narrowly focusing on them. When trying to be creative, there’s a temptation to “think harder.” But after a while, you’ll reach the hopeless stage, where everything will be a jumble in your mind, and you’ll lose the forest for the trees. Stuck, you may lose faith. 

Resist the temptation to think harder.

Do the opposite instead.

Turn the challenge of creativity over to your subconscious mind. Escape the chains of judgment and quiet your internal critic. Drop the problem. Activate your emotions. Stimulate your imagination. Read poetry, listen to music, or explore the city. 

Flashes of clarity arise when we least expect them. They emerge during periods of rest and relaxation, often after periods of deep thought and contemplation.

Creativity is like a rubber band. It depends on the cycle of tension and release. While intense thinking often comes before creativity, new ideas tend to appear when the body is loose and the mind is relaxed. 

To activate the subconscious, remember the Three B’s of Creativity: Bed, Bath, and Bus:

1. Bed — Nap and dream

2. Bath — Relax and let the mind wander

3. Bus — Travel, escape your routine and move like a river.

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Keep the River Flowing

Consider a river.

The faster it flows, the clearer it is. Light fills fast flowing rivers with color and clarity. But when water sits still for too long, it turns mucky. Darkness descends, and clarity vanishes. 

The mind is like a river. It requires continuous flow; sometimes fast, sometimes, slow. 

Explore strange ideas. Speak to strangers. Meet new people. Try new foods. Read, write, and type. Move. Move. Move. 

Don’t consume information. Interact with it. Wrestle with ideas, connect the dots between your experiences, and use that knowledge to make something new. Your pace of learning will accelerate — I promise.

Like a swimmer in a pond, you can control where your mind wanders. If you swim with the current, you’ll be thinking the same things as everybody else. Carve your own, unique path instead.

And as you do, let music be your tailwind. 

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Tune the Tempo

For the first time in human history, we’re all equipped with infinite libraries of on-demand music.

Music exaggerates emotion. Through music, we can change our moods in an instant. 

We can: (1) Boost focus, (2) induce calm, (3) add adrenaline, (4) spur motivation and (5) amplify happiness — all of which can lead to creative insight.

By transporting us through different states of mind, music makes us superhuman. 

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Feeds and Speeds

By adjusting the tempo of information flow, you can achieve dramatic mindset shifts. 

On social media, consumption is quick, topical, and serendipitous. Social media feeds make the mind race. The volume, randomness, and diversity of ideas on social media double as lighter fluid for fresh connections.

In books, consumption is deliberate, multi-layered, and continuous. Books require deep focus, By inspiring ongoing reflection, books help us analyze an idea from every angle, in every dimension, and over time, with enough reflection, books thread the tapestry of our psyche.

To maximize creativity, the fast and quick nature of social media should be tempered with the slow and deliberate nature of books. If books give us the foundation for new ideas to rest upon, tweets and short articles unlock new and unexpected pathways for intellectual exploration.

Life experiences are similar. What we experience in daily life is slow, raw and unfiltered. While everyday experiences take time and effort to make sense of, they produce original insight.

Find your balance of fast and slow, timeliness and timelessness. Information flow is like a symphony. Every note plays a distinct role. Sometimes the music is shallow and simple, and at other times, it’s deep and complex. As the tone, tenor, and beat of the music changes, every instrument performs a distinct, ever-evolving role. Harmony emerges when organic unity emerges out of separate instruments. 

By layering different speeds of information, we can simultaneously develop a sturdy foundation of deep knowledge and illuminating experiences and maximize the flow of new ideas.

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Work with the Door Open

Richard Hamming, a pioneer in digital technology, shared the importance of working with the door open in an excellent essay called You and Your Research: 

“I notice that if you have the door to your office closed, you get more work done today and tomorrow, and you are more productive than most. But 10 years later somehow you don’t know quite know what problems are worth working on; all the hard work you do is sort of tangential in importance. He who works with the door open gets all kinds of interruptions, but he also occasionally gets clues as to what the world is and what might be important… There is a pretty good correlation between those who work with the doors open and those who ultimately do important things, although people who work with doors closed often work harder.”

Creativity doesn’t happen inside our heads. Instead, creativity is born out of interactions between our minds and the environment we inhabit. As a result, creativity is a systemic phenomenon — not an individual one. 

Productivity is a solo quest, but creativity is a collective one. By adding productivity today, we can lose creativity tomorrow. Pursue dynamic environments. Eavesdrop on conversations and make friends with friends in different industries. 

Work with the door open, and when you do, show up regularly. 

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Clock-In 

Action stimulates inspiration more than inspiration stimulates action.

Don’t wait for inspiration to strike. You have to show up before inspiration will. Pick a time, show up, and produce. Every day.

The seeds of creativity are planted long before the flowers bloom into new ideas. John Hayes, a professor at Carnegie Mellon University, calls this period of watering the garden “The 10 Years of Silence.”

In a study analyzing thousands of musical pieces between 1695 and 1900:

“Hayes was curious about how long it took for a musician to produce world-class art. He narrowed it down to 500 masterpieces by 76 composers. By mapping out a timeline for each individual, he looked at when a piece was produced. Outside of only three artists, every composition was written at least a decade after they started to take their work seriously. In follow-up studies of poets and painters, he found the same result. He termed this “The ten years of silence” — a period with a high-production of work but very little recognition.”

It can take ten years to become an “overnight success.”

Our society romanticizes moments of insight, but eureka moments occur because of all the work that comes beforehand.

Since social media is a highlight reel, it makes us think that success is easier than it actually is. We see the fortune without the hard work, the trophies without the sweat, the diplomas without the homework, and the performances without the rehearsals. As a result, it’s easy to overvalue the outcome and undervalue the process. Creativity is the result of weeks, months, years, and decades of hard work.

Legend has it that Isaac Newton was sitting under an apple tree when he was bonked on the head by a falling piece of fruit. Right then, Newton had an “aha moment,” which allowed him to come up with the law of gravity. The narrative is fun, but it’s misleading. 

By the time the apple fell on Newton’s head, he had already taught himself the mathematics of the 17th century, including Euclidean geometry, algebra, and Cartesian coordinates. Newton had also invented calculus, which allowed him to measure planetary orbits and the area under a curve. In total, Newton’s formulation of the concept of gravity was a result of more than 20 years of learning. 

Clock-in and get to work. And when you do, treat this daily ritual with respect and reverence. 

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Foster Fun and Friendship

Forget mentorship. Focus on friendship instead.

Like all creative superpowers, learning from people of all ages is fun and life-enriching. 

Unfortunately, school trains us only to spend time with people our age. As a result, young people don’t spend enough time with old people, and old people don’t spend enough time with young people.

I know people in their 50s who are learning about cryptocurrencies from people in their 20s and people in their 20s who are learning economics from people in their 50s. These friendships benefit both parties. The chain of knowledge runs both ways. The mentorship is mutual, and the learning is implicit — not explicit. 

All things being equal, young people who surround themselves with older people will likely mature faster and reduce the chance of catastrophic, short-sighted mistakes. Likewise, older people who spend time with younger people will confront new ideas and challenge their own, narrowing thought patterns. 

Cross-pollinate ideas between age groups and let the ideas blossom like an artist during the Renaissance.

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Remember the Renaissance

New ideas are articulated by individuals, but generated by communities.

During the Renaissance, humans escaped the sterile, lifeless mentality of the Dark Ages. First, through trading, the manufacture of textiles, and finally the financial expertise of wealthy merchants, Florence was one of the wealthiest cities in Europe. 

Money wasn’t the only ingredient. The rediscovery of ancient Roman methods of building and sculpting, lost for centuries during the Dark Ages, also made the Renaissance possible. Under this atmosphere of wealth, urban leaders dreamed of making Florence the most beautiful city in Christendom — “a new Athens.” Florence was gifted with dazzling churches, spectacular bridges, and splendid palaces. 

As Mihaly Csikszentmihalyi recounted in his book, Creativity: 

“Florence was so beautiful, that more than five hundred years later Hitler ordered the retreating German troops to blow up the bridges on the Arno and level the city around them, the field commander refused to obey on the grounds that too much beauty would be erased from the world—and the city was saved.”

Beauty transcended evil.

Fertilized with regular doses of serendipity and a vibrant blend of wealth, culture, and ingenuity, The Renaissance triggered an intellectual explosion in Europe, which kickstarted the Enlightenment. 

Clusters of creativity emerge when beliefs, lifestyles, and knowledge pollinate. Inspired by this fusion of ideas, individuals can see new combinations of ideas with greater ease. 

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The Urban Updraft

Move to a city. 

Cities aren’t just a set of roads, restaurants, and people — they’re a set of interactions. In cities, we explore the frontiers of human thought and technology.

Humans aren’t the only species that manufacture dynamism through density. Bees organize into hives, ants into colonies, and microbes into living forests. In each example, the whole is greater than the sum of its parts. 

Density isn’t the only urban tailwind.

Cities are havens for free speech and eccentricity. According to a recent study, the formation of creative clusters is not preceded by increases in city size. Instead, the emergence of city institutions protecting economic and political freedoms facilitates the attraction and production of creative talent. 

The greatest serendipity engines of all, cities are where fragile, fringe ideas become concrete realities.

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Raise the Bird

New ideas are like a bird. They begin as frail thoughts, and like a bird, new ideas require care and protection before they can fly. 

Lead Apple designer Jony Ive explained the importance of “raising the bird” during his remarks at a memorial service after Steve Jobs’ death:

“Steve used to say to me — and he used to say this a lot — “Hey Jony, here’s a dopey idea.”

And sometimes they were. Really dopey. Sometimes they were truly dreadful. But sometimes they took the air from the room, and they left us both completely silent. Bold, crazy, magnificent ideas. Or quiet simple ones, which in their subtlety, their detail, they were utterly profound.

And just as Steve loved ideas, and loved making stuff, he treated the process of creativity with a rare and a wonderful reverence. You see, I think he better than anyone understood that while ideas ultimately can be so powerful, they begin as fragile, barely formed thoughts, so easily missed, so easily compromised, so easily just squished.”

Build a nest around new ideas. Be gentle with them and watch them grow with time. 

Then, surrender to the world, let the universe work its magic, and watch creativity emerge. Sooner or later, creative potential will shine through the kaleidoscope. 

Singapore has leaped from third-world to first in just 53 years.

When Lee Kuan Yew took over the country as the nation’s first Prime Minister in 1965, Singapore’s per capita GDP was about $400 a year, similar to Mexico and South Africa. Today, Singapore has a per capita GDP of about $50,000, well above that of the U.S.¹

From the beginning, Lee Kuan Yew faced tremendous odds. Singapore had an unlikely chance of survival. When it gained independence in 1965, Singapore was a tiny, impoverished nation — an island without its hinterland; a heart without a body.

As Devon Zuegel wrote:

“Few expected Singapore to survive when it became an independent country in 1965. It was a tiny, impoverished island with a diverse population of recent immigrants. They had little shared history and no natural resources. Singapore had been colonized, occupied, and abused for over a century, and it was surrounded by hostile nations in a region succumbing to pressure by Communist forces.

Singapore’s acknowledged its challenges and embraced its role as a resource-poor city-state. Singapore depended on the outside world for food, energy, and water. Unemployment was close to 9 percent.²

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Singapore: Laying the Foundation

In his quest to improve Singapore’s economic standing, Prime-Minister Lee adopted the following strategy:³

“When I started, the question was how Singapore can make a living against neighbors who have more natural resources, human resources, and bigger space. How did we differentiate ourselves from them? They are not clean systems; we run clean systems. Their rule of law is wonky; we stick to the law. Once we come to an agreement or make a decision, we stick to it. We become reliable and credible to investors. World-class infrastructure, world-class supporting staff, all educated in English. Good communications by air, by sea, by cable, by satellite, and now, over the Internet.”

Devon Zuegel continues:

“At first, Singapore’s small size was considered a major disadvantage. The city-state imported all of its food, energy, and fresh water, and the surrounding region was embroiled in ethnic conflict, nationalist fervor, and Communist insurgencies. However, Singapore’s lack of resources proved to be a blessing in disguise. Its reliance on the outside world forced the country to think in terms of a global network. To survive, it had to focus on being a valuable, stable trade partner.”

Constrained by its geography, Singapore turned outwards. It promoted exports and direct foreign investment. Singapore embraced global markets and sought multinational companies to spur industrial growth and shifted away from import substitution, towards export-led industrialization, a decision at odds with the conventional wisdom of the time. Few other countries pursued these strategies, which benefited Singapore.⁴

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Singapore: an International Brand

Intelligent branding has accelerated Singapore’s success.

With an open-door policy to foreigners, Singapore has created an environment where businesses want to be. They attract foreign investment through world-class infrastructure, a skilled workforce, open trade routes, a well-enforced rule of law, and low taxes.

By focusing on stability, business conditions, and human capital, Singapore’s encouraged foreign investment:

“To succeed, Singapore must be a cosmopolitan center, able to attract, retain, and absorb talent from all over the world. We cannot keep the big companies out of the local league. Whether we like it or not, they are entering the region. The choice is simple. Either we have a first-class airline, a first-class shipping line, and a first-class bank, or we decline. One of the things we did in the early years was to buck the third world trend by inviting the multinational corporations, and we succeeded. Now, we must buck the third world trend to be nationalistic. We must be international in our outlook and practices…Our own talent must be nurtured to come up to world standards by exposure and interaction with their foreign peers. Some of our best have been attracted away by leading American corporations. This is part of the global marketplace.”

According to Lee, governments should also provide a stable foundation:

“The business of a government is to…make firm decisions so that there can be certainty and stability in the affairs of the people. The art of government is utilizing to the maximum the limited resources at the country’s disposal… The acid test of any legal system is not the greatness or the grandeur of its ideal concepts, but whether, in fact, it is able to produce order and justice in the relationships between person and person, and between person and the state.”

As the world economy changed, so did Singapore. During its first two decades, Singapore’s economy grew by about 10% per year. It transitioned from trading in spices, tin, and rubber to simple manufacturing such as water fabs, pharmaceuticals, and Asian currency units:⁵

“By 1975, Singapore had established a substantial industrial base, with manufacturing’s share in GDP climbing to 22% from 14% in 1965. The economy was at full employment and it was clear that Singapore had to move up the value chain towards more capital-intensive and skill-intensive activities… By the late 1970s and early 1980s, we saw the emergence of strong clusters in higher value-added electronics, petrochemicals, component and precision engineering. In the 1980s, Singapore became the world’s leading producer of hard disk drives – an early form of memory storage used in computers at the time.”

As Lee Kuon Yew observed, the results were outstanding:

“We have created this out of nothingness, from 150 souls in a minor fishing village into the biggest metropolis 2 degrees north of the equator. There is only one other civilization near the equator that ever produced anything worthy of its name. That was in the Yucatan Peninsula – the Mayan Civilization There is no other place where human beings were able to surmount the problems of a soporific equatorial climate.”

What follows is a collection of observations about America and Singapore from Lee Kuan Yew, the long-time Prime Minister of Singapore.

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America: An International Perspective

Lee Kuon Yew’s outside perspective on America gives him an enlightened, international vantage point. Lee identified risks that threaten American prosperity.

Contrasting America with Asia, Lee observed:

“One fundamental difference between American and Oriental culture is the individual’s position in society. In American culture, an individual’s interest is primary. This makes American society more aggressively competitive, with a sharper edge and higher performance.”

Above all else, Lee admires America’s capacity for creativity and entrepreneurship — renewal and revival:

“America’s strengths include no grooved thinking but rather an ability to range widely, imaginatively, and pragmatically; a diversity of centers of excellence that compete in inventing and embracing new ideas and new technologies; a society that attracts talent from around the world and assimilates them comfortably as Americans; and a language that is the equivalent of an open system that is clearly the lingua franca of the leaders in science, technology, invention, business, education, diplomacy, and those who rise to the top of their own societies around the world.”

The United States has a “start from scratch and beat you” culture. America is a frontier society where citizens are encouraged to start new enterprises and create wealth.

“These are the four salient features of America’s entrepreneurial culture: (1) a national emphasis on personal independence and self-reliance, (2) respect for those starting new businesses, (3) acceptance of failure in entrepreneurial and innovation efforts, and (4) tolerance for a high degree of income disparity.”

Due to its culture of entrepreneurship, America is always transforming. However, America’s belief in individual liberty comes at a cost:

“The ideas of individual supremacy…when carried to excess, have not worked. They have made it difficult to keep American society cohesive. Asia can see it is not working. Those who want a wholesome society where young girls and old ladies can walk in the streets at night, where the young are not preyed upon by drug peddlers, will not follow the American model…The top 3 to 5% of a society can handle this free-for-all, this clash of ideas. If you do this with the whole mass, you will have a mess…To have, day to day, images of violence and raw sex on the picture tube, the whole society exposed to it, it will ruin a whole community.”

Individual supremacy creates a multitude of issues in American culture:

“I find parts of [American culture] totally unacceptable: guns, drugs, violent crime, vagrancy, unbecoming behavior in public, in sum, the breakdown of civil society. The expansion of the right of the individual to behave or misbehave as he or she pleases has come at the expense of orderly society…It has a lot to do with the erosion of the moral underpinnings of a society and the diminution of personal responsibility. The liberal, intellectual tradition that developed after World War II claimed that human beings had arrived at this perfect state where everybody would be better off if they were allowed to do their own thing and flourish.”

Americans believe in the supremacy of their own culture and rarely question this assumption. Most Americans see America’s dominance as an absolute fact, not an accident of history. This American attitude poses a severe risk. As China expands its influence on the global stage, Americans will have to revise their thinking:

“The sense of cultural supremacy of the Americans will make this adjustment most difficult. Americans believe their ideas are universal—the supremacy of the individual and free, unfettered expression. But they are not—never were. In fact, American society was so successful for so long not because of these ideas and principles, but because of a certain geopolitical good fortune, an abundance of resources and immigrant energy, a generous flow of capital and technology from Europe, and two wide oceans that kept conflicts of the world away from American shores.”

Americans have a quasi-religious belief in the power of popular democracy. The system, however, is imperfect. The problem with popular democracy is it incentivizes a short-term mentality. In search of re-election, leaders avoid essential discussions and topics that may divide the voting populous.

“Contrary to what American political commentators say, I do not believe that democracy necessarily leads to development. I believe that what a country needs to develop is discipline more than democracy. The exuberance of democracy leads to undisciplined and disorderly conditions which are inimical to development…

When you have popular democracy, to win votes you have to give more and more. And to beat your opponent in the next election, you have to promise to give more away. So it is a never-ending process of auctions—and the cost, the debt being paid for by the next generation. Presidents do not get reelected if they give a hard dose of medicine to their people. So, there is a tendency to procrastinate, to postpone unpopular policies in order to win elections. So, problems such as budget deficits, debt, and high unemployment have been carried forward from one administration to the next.”

Lee believes that popular democracy, especially in today’s media environment, leads to problems. For example, the best marketers — not the best governors — get elected.

“The presidential system is less likely to produce good government than a parliamentary system. In the presidential system, your personal appearance on TV is decisive, whereas in a parliamentary system, the prime minister, before he becomes the prime minister, has been a member of parliament, and probably a minister, and in Britain the people have sized you up over a period of time…and they have come to certain conclusions as to what kind of a person you are, what kind of depth you have, what kind of sincerity you have in what you say… Your presidents, I mean, like Jimmy Carter… my name is Jimmy Carter, I am a peanut farmer, I am running for president. The next thing you know, he was the president! Security, prosperity, and the consumer society plus mass communications have made for a different kind of person getting elected as leader, one who can present himself and his programs in a polished way… I am amazed at the way media professionals can give a candidate a new image and transform him, at least superficially, into a different personality. Winning an election becomes, in large measure, a contest in packaging and advertising… A spin doctor is a high-income professional, one in great demand. From such a process, I doubt if a Churchill, a Roosevelt, or a de Gaulle can emerge.”

Elected officials take the easy way out. But by borrowing to give higher benefits to the current generation, officials pass on the costs to future generations who are not yet voters, which results in budget deficits and high public debt:

“American and European governments believed that they could always afford to support the poor and the needy: widows, orphans, the old and homeless, disadvantaged minorities, unwed mothers. Their sociologists expounded the theory that hardship and failure were due not to the individual person’s character, but to flaws in the economic system. So charity became “entitlement,” and the stigma of living on charity disappeared. Unfortunately, welfare costs grew faster than the government’s ability to raise taxes to pay for it. The political cost of tax increases is high.”

Lee saw America’s debt as part of a broader issue — “Buffet Syndrome.” Lee believed that the West’s real mistake has been to set up “all you can eat” welfare states. When benefits are free, people consume them voraciously. In Singapore, families — not government — are the ultimate safety net. Singapore’s government has run budget surpluses almost every year for five decades.⁶

“Realism and pragmatism are necessary to overcome new problems. Only those basics that have proved sound in the past should not be changed unless absolutely necessary. Amongst them are honesty and integrity, multi-racialism, equality of opportunities, meritocracy, fairness in rewards in accordance with one’s contribution to society, avoidance of the buffet syndrome where, for a fixed price, you can take or eat as much as you want. That is why welfare and subsidies destroy the motivation to perform and succeed.”

As economic influence shifts east, towards the Pacific, America must maintain its stronghold over the region:

“What does the U.S. need to do to maintain global primacy? The 21st century will be a contest for supremacy in the Pacific, because that is where the growth will be. That is where the bulk of the economic strength of the globe will come from. If the U.S. does not hold its ground in the Pacific, it cannot be a world leader. America’s core interest requires that it remains the superior power on the Pacific. To give up this position would diminish America’s role throughout the world.”

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The Singapore Strategy

When I hear stories about trips to Singapore, people are always impressed by the knowledge of Singapore’s citizenry. They seem to have an unparalleled understanding of economic, engineering and public policy.

Tyler Cowen called Singapore’s distinguished polity and “one of the best and most interesting sights of the contemporary world, more interesting than most natural wonders.” Singapore’s intellectual society is the result of a collection of traits that are encouraged by the government.

Singapore’s intellectual society is a result of a collection of traits that are encouraged by the government.⁷ Lee believed that Singaporean citizens should cultivate three qualities:

1. A striving, acquisitive community. You cannot have people just striving for a nebulous ideal. They must have that desire to improve… You must equate rewards to performance, because no two persons want to be the same. They want equal chances in order that they can show how one is better than the other.

2. We want forward-looking good management. The old family business is one of the problems in Singapore.

3. Easy social mobility. One of the reasons contributing to Japanese and German recovery was that their defeated capitalists, managers, executives, engineers, and workers…were fired by a singleness of purpose: to put their country back on its feet.

Singapore is one of the best functioning bureaucracies in the world.

From an American perspective, Singapore has achieved the impossible. The country spends on about 5 percent of GDP on the medical sector but delivers some of the world’s best health outcomes. Even education only consumes 3.3 percent of GDP.⁸ In contrast, America spends roughly 17 percent of its GDP on the health sector but suffers from worse outcomes. Singapore’s entire government spending (17 percent of GDP) is approximately equal to America’s spending on the healthcare sector. Singapore’s government is relatively small. Taxes are low, and there are no additional state and local government taxes.⁹

Singapore’s citizenry has an ethos of public service. As Tyler Cowen remarked:

“Strikingly, Singapore is one of the few countries where there is brain drain into the public sector. This stems partly from the high salaries paid. Top bureaucrats typically receive more than their American equivalents, and cabinet-level pay may exceed $800,000, with bonuses attached that can double that sum for excellent performance.”

Lee saw a clean, efficient, rational and predictable government as a competitive advantage. He sought order and justice in the relationships between citizens and the state. Singapore’s government officials rank among the highest paid in the world. Singaporeans believe that high pay for government officials will reduce — or even eliminate — corruption. The salaries of Singapore’s judges, ministers, and top civil servants resemble the salaries of leading professionals in the private sector.

As the country developed, Lee didn’t just focus on the government; he also molded habits and social customs. Inspired by American ideals, Lee encouraged Singaporeans to accept immigrants — no matter where they originated.

Lee’s top three priorities were cultivating (1) a determined leadership, (2) an efficient administration, and (3) social discipline:

“When I started, the question was how Singapore can make a living against neighbors who have more natural resources, human resources, and bigger space. How did we differentiate ourselves from them? They are not clean systems; we run clean systems. Their rule of law is wonky; we stick to the law. Once we come to an agreement or make a decision, we stick to it. We become reliable and credible to investors. World-class infrastructure, world-class supporting staff, all educated in English. Good communications by air, by sea, by cable, by satellite, and now, over the Internet.”

Singapore’s social discipline points to a fundamental difference between American and Singaporean culture: Americans believe in the primary rights of the individual while Singaporeans prioritize the interests of the masses over the interests of the individual. Inspired by this philosophy, Lee instilled a belief in thrift, hard work, filial piety, loyalty in the extended family, and most of all, respect for scholarship and learning.

“Habits that make for high productivity in workers are the result of the values implanted in them at home, in school, and at the workplace. These values must be reinforced by the attitudes of society. Once established, like a language a society speaks, the habits tend to become a self-reproducing, self-perpetuating cycle.”

A common language makes social cohesion much easier. Singapore’s schools focused on teaching English. Due to its English-speaking populous, Singapore can collaborate with the most influential multi-national corporations.

“To optimize our opportunities, we must retain the vigor of our multi-racial-lingual-cultural-religious society. We have the advantage of all being educated in English in an age when English is the common language of the world and the Internet. However, we must not lose our basic strengths, the vitality of our original cultures and languages.”

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Facing the Future

There are stark cultural differences between Singapore and America — East and West. America is democratic, while Singapore has an authoritarian bent; Singapore focuses on the collective, while America focuses on the individual; Singapore’s government operates with lean efficiency, while America is a bloated, inefficient bureaucracy.

As American productivity has stagnated and its citizens have become complacent, Singapore’s seen remarkable growth. Americans cannot copy Singapore — only draw from their experience. That, though, is an intelligent decision.

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Footnotes

¹ Source: CEIC Data

² The British government withdrew its troops from Singapore in 1968. Thousands of workers immediately lost their jobs. As much as 1/5th of the economy risks coming to a halt.

³ All quotes in this post come from Lee Kuan Yew: The Grand Master’s Insights on China, the United States, and the World unless otherwise noted.

⁴ According to Wikipedia, Import Substitution Industrialization is trade and economic policy which advocates replacing foreign imports with domestic production. ISI is based on the premise that a country should attempt to reduce its foreign dependency through the local production of industrialized products.

⁵ Source: An Economic History of Singapore

⁶ Source: Marginal Revolution

⁷ Of course, there are other factors too. For example, I suspect that Singapore’s density makes it easier to motivate the populous.

⁸ Source: The Economist

⁹ Source: Bloomberg

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Cover photo by  Coleen Rivas on Unsplash

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In ruins, we find beauty in the lost.

Every ruin is a relic of history, evidence of the human quest for immortality.

Paul Cooper, a British Ph.D. candidate, is intrigued by the timeless allure of ancient and modern ruins. On a recent episode of the North Star Podcast, Cooper said:

“Every ruin is a place where a physical object was torn apart, and that happened because of some historical force. If a building is ruined, an economic ruin, a closed down factory, — whether it’s been blown up by a bomb, or it’s been abandoned because people moved away — it’s because huge historical forces have washed over it…. So, each ruin is a window into a particular historical moment where something changed. That’s what really fascinates me every day about them.”

Humans have always explored ruined places. Ruins reflect the diversity of human emotion and are associated with the occult and with dreams.

Ruins freeze the passage of time and create ghost-like sensations. They are silent, empty places. Sometimes we draw inspiration from ruins, and sometimes, they terrify us. Historically, people were afraid to enter ruined sites for fear of ghosts who were believed to roam there.

Ruins are portals to another time. Ruins bring back the dead and unsettle the ruin gazer.

By analyzing the ruins before us, we grant them meaning.

Cooper continues:

“When people in previous ages have looked at ruins, what they see is what we’ve been describing. There was a cataclysmic event, something went wrong here, and they try to tell stories about why that might have happened…Ruins don’t mean anything by themselves. They seem like a kind of place that slightly resists meaning. People try to give meaning to them. They try to tell stories about them that make sense about what must have happened.”

Ruins speak to the passage of time. From the tangled gardens of the Roman Colosseum to the towering summit of Machu Picchu, ruins inspire evocative melancholy and force us to pause — to regain moments of stillness — amidst the rush of modern life.

Many artists portray ruins as places outside of time, where observers get lost in the breadth of history and time slips away.

Here’s Cooper:

“Everyone who comes to a ruin brings a different perspective and a different story and a different meaning. And all the time, the ruin is just sitting there, kind of meaning nothing. It doesn’t mean anything by itself. It needs somebody to come along and give it meaning. And so in that way, the ruin forms a battleground. Everybody is in this five-way tug of war about what this crumbling mass of bricks in the desert means and that’s what makes them incredible places to study.”

Ruins freeze a moment in time. In turn, ruins marry the work of man and the destruction of the natural world.

Symbols of enlightenment and repositories of lost knowledge, ruins illuminate the fragile, fleeting nature of life — the entropy of history.

In ruins, we find poetry.

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Cover Photo: Paul Simpson/Flickr via C.C. 2.0

“The real enemy is the man who tries to mold the human spirit so that it will not dare to spread its wings.” – Abraham Flexner

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The best opportunities are the ones you never expected.

They’re serendipitous. 

Serendipity is a state of mind. Serendipity births unexpected opportunities which fuel progress and push us in fruitful directions. By maximizing serendipity, you’ll accelerate your progress. 

Serendipity is a skill, which means it can be learned. 

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Build a Serendipity Vehicle

Writing is the best kind of networking. 

By making it easy for people to find you online, you’ll create a vehicle for serendipity. Call on your vehicle when you want to manufacture serendipity, and you need some activation energy. 

My vehicle is the North Star Podcast. 

Less than three months after starting the North Star Podcast, I was introduced to Neil deGrasse Tyson, arguably the most famous scientist in the world. All I did was ask for a previous podcast guest to introduce me to one of his friends. Turns out, Neil deGrasse Tyson is one of his best friends. 

If you publish content (blogs, podcasts, videos, etc.) regularly, people will discover you and initiate unexpected opportunities. They’ll open doors you didn’t even know existed. 

Maintain a website so people can find your bio, share your work, and describe you in a favorable light. Once your website is live, publish content to encourage people to visit your website, advertise your skills and hype you up.

Relationships built on trust, joy and mutual respect are the foundation of serendipity. 

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Be a Connector

I rarely go to conferences or traditional networking events. Doing so feels like a waste of energy, like trying to stand on your tiptoes at a parade. 

In my experience, the best networking happens indirectly. Meet people on the basketball court, in the gym, or at a meal instead of going to a networking event. 

Host intimate events. I host a group in New York called Things We’ve Never Done Before. It’s a collection of passionate, hyper-curious individuals. Every now and then, we meet up for a day of fun, exercise and adventure.¹ 

Open doors for people. 

When you connect other people, tons of value will eventually flow back to you. Introduce your friends to each other. Opportunities are everywhere: Say yes to pick-up basketball, a spontaneous afternoon run, or a trip to the museum.

The healthier you are, the more activities you can attend. 

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Prioritize Your Health

People want to be with healthy people. 

Eat healthy food, get enough sleep, and break a sweat every day. It’ll boost your mood and fuel your curiosity. 

People are drawn to people who are energetic and engaged. Healthy people are much more likely to cultivate these traits and enjoy a diverse lifestyle. 

People who sweat together stay together. 

Working out with a friend is social and productive. Turns out, it’s also one of the best ways to spark, maintain, and nurture a relationship. 

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Zig and Zag

Do opposites. 

Work on many things at the same time. Surround yourself with eclectic people. Skip the standard destinations and travel to obscure places instead. 

Cross-pollinate ideas from different industries, disciplines, and places. Surround yourself with a diversity of people and develop a variety of skills. The space between ideas will give you a fresh perspective that you can use to problem solve and come up with new ideas. 

Because of your unique set of skills, lucrative deals will flow through you and other people will open doors for you. They’ll sell your abilities and hype you up, leading to serendipitous encounters. 

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Avoid Boring People

This advice comes from Jim Watson, who’s famous for co-discovering DNA.

Watson says: “Avoid Boring People.”

On the North Star Podcast, Josh Wolfe said this was the best advice he’s ever received. 

“Avoid Boring People.” Three words, two meanings. The trope is a reminder to (1) stay away from people who aren’t interesting and (2) to be interesting and avoid boring people when you’re speaking with them.

Build conversational momentum by asking questions, staying engaged, and talking about the other person’s interests.²

Whether you’re sitting on an airplane, relaxing in a coffee shop, or walking through a hotel, you’ll be able to speak with anybody, anywhere.

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The Hotel Bathroom Principle

Whenever I’m in a city and I need to use the bathroom, I walk into a fancy hotel. 

Fancy hotels always have nice bathrooms. And if you’re dressed well and walk confidently, you won’t be hassled for using the bathroom. 

The world is becoming more casual. But if you dress too casually, it looks sloppy and careless. 

When you want to cultivate serendipity, stick to the “Hotel Bathroom” dress code. Always dress well enough to walk into a bathroom at a hotel you’re not staying at and get away with it. 

If you remember the “Hotel Bathroom Principle” you’ll always look sharp enough to capitalize on a serendipitous encounter.

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Find the Fast Flow

Lucky people move with life, not against it. 

They swim with the current in a wide, ever-expanding river. By doing so, they maximize their surface area of serendipity. 

Lucky people bathe in the reverie of adventure. They surround themselves with people who motivate and inspire them. People who maximize serendipity balance the humility of not knowing where their next big break will come from with the arrogance of knowing that it will come from somewhere.³ 

Move to a city. Pursue dynamic environments.⁴ Talk to people. Speak with passion and enthusiasm. Write online. Be curious. Ask about the other person, and when you do, listen intently.

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Ambient Relationships

Ambient music is gentle and repetitive. It’s soothing and generates a sense of calmness. It plays in the background, and when you want to listen to it, all you need to do is shift your attention.

Relationships are like ambient music. Staying in touch with people isn’t about being loud and aggressive. It’s about subtle, regular connection.

Stay top of mind with the people who matter most to you. 

This is why I started a weekly email newsletter. Every Monday, I send out an email with nuggets about what I’m doing, learning, and thinking about. I want to make it easy for people to know how they can help me. 

Call people on their birthday. When you think of a funny memory with a friend, text your friend about it. If you watch a video they’ll like, forward it to them. 

Reach out to people you haven’t spoken to recently. When you do, try to have a reason for doing so. It’ll make the conversation much more fun. 

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Twitter DM is a Superpower

If Facebook connects you with people from your past, Twitter connects you with people in your future. 

Get on Twitter.

It’s an interest-based social network, where geography barely matters. On Twitter, you can meet people you’d never be able to meet in real-life.

Tweet about what interests you. Watch what people engage with and tweet more of it, as long as it helps you earn credibility.

Follow like-minded people. Send generous, thoughtful replies. Tweet so the people you admire most will follow you. 

Once they do, send them a direct message. 

Twitter DMs are a secret superpower. 

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Go First

Sometimes, it helps to have a little nudge — some activation energy. 

I’m inspired by a simple mantra: “Go First.”

Talk to your crush. Send that email. Dish a compliment. The upside is limitless; the downside is just a sprinkle of embarrassment. 

For example, I’m ruthless about following up with people.⁵ I set strict reminders for myself and I always follow-through.

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Ask for Help

Tell the world what you want. Advertise your goals by painting a picture of your ideal future. 

Every now and then, I send out an update to my entire network. In it, I share highlights, goals, and open up about my challenges. Here’s my most recent personal update.

People love to help other people when the framing is right. 

Paradoxically, big goals are sometimes easier to achieve than small ones. Big goals energize everybody — they’ll energize you and everybody around you. By communicating clear, ambitious goals, you’ll galvanize support and attention.⁶

When you ask for favors, follow these three guidelines: (1) be specific and precise, (2) tell the other person why you’re asking for their help, and (3) after they’ve helped you, follow up with them thank them or provide an update. 

Asking for help is an art, not a science.⁷ 

If you remember one thing, remember this: Make it easy for people to help you. 

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Tips and Tricks

Networking events are over-rated: As a general rule, the people you want to meet don’t go to networking events. Instead, I recommend small invite-only gatherings, parties adjacent to prestigious conferences, and casual events like pick-up basketball. 

Don’t “Pick Somebody’s Brain”: Help them instead. Whenever I want to meet somebody, I ask to interview them. Doing so makes the time much more productive for the other person. I did this in as an intern in college and I do it now. 

Note: If you’d like to receive future posts by email, subscribe to my “Monday Musings” newsletter. 

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Acknowledgements

Thanks to Andy McCune, Arjun Balaji, Alex Hardy, Nick Maggiulli, and Conor Witt for conversations that fueled these ideas. 

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¹ Here are some ideas for you: host a brunch, invite people over for board games and drinks, or start an interview series. 

² Know enough about enough so you can talk to anybody, from artists to scientists to athletes. This will help you spark up engaging conversations with people you’ve never met before.

³ While writing this post, I ran into a friend at lunch, and now, we’re recording a podcast together. 

⁴ Eugene Wei, a previous North Star podcast guest, has had a hugely successful career. When I asked him what he looks for, he said he looks for a giant wave. Then the gets on it, and trusts that the wave will spit him out somewhere in the right direction. 

⁵ Three quick stories: 

1. I’ve been writing on Twitter for years. In college, something I wrote was discovered by Jason Stein, the founder of Cycle Media. After reading my tweets, he sent me a direct message and asked me to work for him. That’s how I ended up in New York.

2. In December 2016, I attended a live recording of the Tim Ferriss Podcast. There, I was blown away by the intelligence and creativity of Adam Robinson, who was being interviewed. I sent him an email, asked him to come on the podcast, and now, he’s a mentor to me.

3. At a mentor’s birthday party a couple months ago, I spoke briefly with one of his colleagues. I didn’t know it at the time, but he co-founded the world’s largest YouTube Channel and worked with some of the biggest names in the music industry. Even though we only spoke for 5 minutes at the party, I asked for his phone number and scheduled a time for dinner. We ended up spending 10 hours together. I’m lucky to call him a friend now.

⁶ Your request should be broad, but not too broad. Narrow, but not too narrow.

Too broad and somebody won’t know how to help you. Too narrow and you might miss an unexpected opportunity. 

⁷ Every industry has different ways of cultivating serendipity. In fashion, people cultivate serendipity by posting Instagrams in trendy garments. In cryptocurrencies, serendipity emerges through Telegrams and dinner events. This is why serendipity is a mindset. The optimal strategy varies from person to person, depending on their specific circumstances. 

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On social media, people want to connect with people — not companies. Likewise, people increasingly want to connect with stars — not teams.

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Let’s go back to the future.

To a time when LeBron James transformed sports right before our eyes. Without knowing it, we were all witnesses.

It was 2010. LeBron James, a two-time NBA MVP had played seven years in Cleveland. As he entered his prime, LeBron was up for free agency. The season was over, and yet, all eyes were on the NBA. It was uncanny.

Where would LeBron play next? Would he stay in Cleveland? Or would he betray his beloved hometown?

Sensing the magnitude of his announcement, LeBron hosted a prime-time special on ESPN to announce his move from the Cleveland Cavaliers to the Miami Heat.

The Decision was more than a free agency announcement. It was a rare once-in-a-generation peak into the future of media, sports, and celebrity — a foreshadowing.

The Decision set a whole host of dominos in motion, the weight of which changed the NBA forever. The Decision occurred only two days after LeBron opened his Twitter account, a few days before his website and management company launched, and just a few weeks before LeBron started filming his first movie.

The Decision was the birth of the NBA as a 12-month sport, where the offseason can be as exciting with an offseason as the regular season. The rumors before The Decision sent the internet into a frenzy, thereby birthing Twitter’s global community of NBA fans.

As the Washington Post described:

“NBA Twitter coalesced as a community during James’s free agency in 2010. James had injected maximum suspense, and fans gathered on sites such as Twitter and Reddit to discuss his pending decision ad nauseam, reading the Internet’s tea leaves for clues. ‘All we did was chase private planes and swap this information… ‘Oh, there was a flight that took off from Akron to Miami — what does that mean?’ That was the moment.’”

Today, LeBron James — “The King” — is considered the most influential athlete in America.

In LeBron’s wake, we’ve entered an age where athletes express themselves, circumvent large media outlets, and connect with fans on their own terms.¹

LeBron’s decision to play for Miami came at a pivotal moment in sports history; for the first time, stars controlled the teams they played for and the owners who employed them.

LeBron’s announcement foreshadowed the future of sports, media, and marketing, and laid the foundation for basketball’s ascent to the global stage.

History will remember The Decision as a decade-defining event, a pivotal moment, destined for a permanent spot in the history books.

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State of the Leagues — The NFL vs. The NBA

As the NFL loses popularity, the NBA is thriving.

The NBA estimates that roughly 1.4 billion people connect with the NBA every day. In 2017, the NBA became the first professional sports league to pass one billion social media likes and followers across all league, team, and player accounts.

Defying all expectation, NBA TV ratings are up.² Attendance has climbed as well: more than 22 million fans flooded an NBA arena during the 2017 regular season. NBA League Pass subscriptions climbed 10 percent, and website visits increased by 27 percent.

The NBA’s digital success is a result of the league’s foresight and its progressive ethos.

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Progressive Actions

Historically, leagues have tried to distance themselves from partisan political frictions. They have honored the troops and flown fighter jets over stadiums during the Star Spangled Banner. Leagues have held poignant moments of silence to honor the victims of tragedies.

Leagues avoided controversial social debates. Even when they confronted them, they avoided the fragile sensitivities of the moment by touching heated debates only once the dust had settled, the controversies had subsided and the history books had been written.

Like basketball itself, the NBA encourages each athlete to showcase their individuality.

The league encourages its athletes to assume vocal roles in politics, culture, and social action. It operates with an ethos of sincerity. Instead of silencing its athletes, the NBA gives them a bigger megaphone.

Even in the internet age, the NBA’s hands-off approach to athletes remains controversial. Today, traditional sports media outlets believe talking politics is out of bounds for an athlete.

Bashing LeBron James and Kevin Durant for their criticism of President Trump, journalist Laura Ingraham said:

“It’s always unwise to seek political advice from someone who gets paid $100 million a year to bounce a ball… Keep the political comments to yourselves. … Shut up and dribble.”

Sorry, Laura.

The “shut up and dribble” era is over.

Through social media, athletes bypass centralized media sources and offer alternative perspectives, many of which have been muzzled historically.

Athletes like LeBron James feel an obligation to speak out on social issues. Through social media, they can influence the narrative. In 2012, James took to Twitter to commemorate the death of Trayvon Martin by wearing a hoodie with the hashtag #WeAreTrayvonMartin.

I suspect that the force and frequency of LeBron’s political activism will increase.

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Media Savvy

The marketing strategies of American sports leagues reveal their priorities: the NFL markets the shield, the MLB markets the franchises, and the NBA markets the players.

The NFL feels like a return to the past. The reach of football games depends on the popularity of television, an attitude of American exceptionalism, and a cultural reverence for toughness.² The NFL will suffer if those sentiments fade.

While the NFL fights the future, the NBA is embracing it.

Stars drive the NBA. Out of all American sports leagues, basketball players have the largest social media followings.

For young fans, social media has replaced SportsCenter.

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Snacks, Meals and #NBATwitter

Twitter is the hub of basketball’s fervent fandom.

On Twitter, fans curate memes, reaction shots, nuanced analysis, extraordinary highlights, and competitive trash talk from all corners of the basketball world.⁴

Basketball has historically attracted a diverse, urban audience. Through a progressive adoption of new technology, the NBA has attracted young audiences that live on the internet; 45 percent of fans are younger than 35 years of age, making the NBA the only major American sports league where the average fan age is declining.⁵

According to NBA commissioner Adam Silver, highlights are the snacks and games are the meal:

“We analogize our strategy to snacks versus meals. If we provide those snacks to our fans on a free basis, they’re still going to want to eat meals — which are our games. There is no substitute for the live game experience. We believe that greater fan engagement through social media helps drive television ratings.”

Unlike other American sports leagues, the NBA promotes the posting of game highlights, even from amateurs on social media. On YouTube, full-game highlights are available immediately after every game.

In the internet age, leagues have a choice: they can either build a dam or open the flood gates.

The NFL and MLB have doubled down on piracy and copyright restrictions. They go after sites and social media users who post video without permission. The NBA though, does the opposite — the floodgates are an astute marketing strategy.

Instead of issuing copyright restrictions, the NBA uses YouTube technology to identify game highlights, and when they do, they profit from the advertising. It’s a win-win for fans and the league.

Contrast these policies with the NFL, a league that, in addition to restricting speech, bans teams from reproducing highlights of their own games.

Twitter is like a 24/7 sports bar; a place where player personalities amplify their athletic achievements and everybody has a court-side seat.

#NBATwitter is… pic.twitter.com/ifr1HRWoXI

— Twitter Sports (@TwitterSports) May 30, 2018

Many of today’s NBA stars grew up on the Internet, and as a result, they’re highly attuned to popular culture.

With textured public personas, the stars can feel more like close friends and less like distant celebrities. Some stars, like Joel Embid, are as savvy on Twitter as they are skilled on the court. Fans relish Embid for his unapologetic humor, voracious trolling, and the audacity to publicly ask Rihanna on a date. Other fans flock to the perpetual beef between Russell Westbrook and Kevin Durant.

“NBA synchronicity” is a personal favorite.

Throwing shade is an emerging internet art form.

Sometimes, the players talk trash right before our eyes. On its best nights, Twitter feels like a sitcom.

The methods have evolved, but the NBA soap opera has been around for decades: ⁶

“The practice of trading cutting remarks and insults has been a part of pro basketball for a long time, but it gained prominence in the 1960s and 1970s. As African American players from urban cities populated pro basketball, they brought with them the tradition of “the dozens,” a spoken-word battle of wits commonly played with spectators present to cheer and hiss the competitors. On the court, insults added a psychological element to what was primarily physical warfare.”

Brash and blunt, LeBron James has rekindled the spirit of trash talk.

As the New York Times observed:

“The N.B.A. seems to have hit upon a solution to a problem that is vexing sports officials everywhere: how to get young people to pay attention. It has done this by becoming no longer merely a league of winning and losing, but a place for latching on to players and teams, often for reasons having nothing to do with their on-court play — like, tweets that develop a public-facing personality.

Drawing on not only the games themselves but also social media, off-court news, advertising and even politics, the league combines the melodrama of soap operas, the intimate access (whether real or contrived) of reality television and the personalized whimsy of fan fiction.”

As relationships between fans and their favorite stars develop, so will fandom itself.

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Evolving Fandom

The visibility of NBA stars in the social media age — on and off the court — are driving shifts in fandom.

Fans are increasingly following players, not teams. The shift in fandom from teams to players began in 2005, with the FreeDarko movement.

Here’s The New York Times again:

“The N.B.A. has been far more personality-centric than the other sports leagues… Named for the Detroit Pistons’ fledgling big man Darko Milicic, FreeDarko advocated “liberated fandom,” or allegiances based not on a fan’s geography or personal history but on moment-to-moment likings. It mapped colorful personalities onto players and teams.”

Darko was the #2 pick in the 2003 NBA Draft — right after LeBron James.

When it comes to marketing its athletes, the NBA’s advantages are built into the structure of basketball itself. Compared with the NFL and MLB, the NBA has fewer players.

Before the internet, access to basketball games was constrained. Sports was primarily a local affair: local newspapers focused on local team coverage, local radio aired local games and local television networks broadcast local games.

On the internet, fans can access the best basketball content regardless of where its produced. Accessing the best content no longer requires a subscription. It’s just a click away now.

Due to the removal of friction, writers are shifting their coverage from a focus on teams to a focus on the entire NBA. Fans, then, have relationships with their favorite players and the entire league — not just their hometown team.

As Eugene Wei has written:

“The most important part of live sports value chain is increasingly moving from local city/community + team to individual player + highlights. Social is filling the old of role local city/community, but at a much larger scale. Social also made the player more visible and prominent.”

As the role of geography in our lives evolves, shifts in NBA fandom will continue.

Intense fandom isn’t an entirely new phenomenon. Fans have marched with quasi-religious intensity since the rise of Mozart and the early days of classical music in the 1700s.

But today, through digital media, fans are channeling and expressing their fandom in imaginative ways:

“In the modern age, fans don’t just want to support their favorite brands; they want to establish emotional connections with them. Their fandom is not consumptive, but rather performative, active, and social. Subcultures of intense fandom are centered on a set of activities — pilgrimages, rituals, socializing, and evangelizing.”

Spurred by intense fandom, fans are turning towards video games and eSports. ⁷

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Video Games

Through video games, basketball fans like me experience the NBA experience first hand. As a kid, I spent hours playing NBA-inspired video games, from Backyard Basketball to NBA 2K, and tasted the mystical dominance of my favorite players.

Commissioner Silver has exploited this opportunity:

“We’ve always believed that, to an extent, young fans become engaged with the NBA through our video games, and by learning about the players and the teams, they’re more likely to want to engage in the live product. We have research demonstrating that. In addition, we think there’s an opportunity to capture a new kind of fan, one who currently isn’t necessarily watching our games on television, but is more of a gamer, and is interested in NBA content and enjoys playing our NBA 2K game. It’s the number one–selling sports title in the U.S., and we know there are millions of players.”

Owners have recognized the opportunity as well; some have even invested in e-sports teams based on NBA 2K.

In college, I spent hours playing NBA-inspired video games. Through the game, I studied the players, dissected their go-to moves, and relived iconic NBA moments.

The most recent version of 2K (NBA 2K18) goes beyond the arena. Gamers — like the stars of today — have lives beyond the court; they can join the Pro-Am circuit, play street-ball at the local playground, and even shop for clothes in the open neighborhood setting.

As athletes grace video game covers, they’re acquiring both influence and negotiating leverage as they dominate routine fan interactions.

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LeBron Makes the Rules

LeBron James is keenly aware of the weight of his influence.

Due to NBA salary cap limits, stars are diversifying their revenue streams. Today’s biggest stars make more money off the court than on the court. The top 12 endorsers in the NBA make $233 million per season combined.⁹

Basketball stars aren’t just athletes — they’re brands.

Off the court, LeBron will earn more than $35 million this season, spurred by a lifetime deal with Nike worth a reported $1 billion.

Until recently, stars stayed put. They rarely changed teams, even in free agency.¹⁰ That system crumbled under the weight of The Decision. Today’s superstars are free to pursue personal achievement satisfaction.

Shortly after The Decision, while playing for the Miami Heat, LeBron signaled his outsized influence during a road trip to Cleveland.

As Phil Jackson, arguably the most successful coach in NBA history, recounted:

“When LeBron was playing with the Heat, they went to Cleveland, and he wanted to spend the night. They don’t do overnights. Teams just don’t. So now [coach Erik] Spoelstra has to text [president Pat] Riley and say, ‘What do I do in this situation?’ And Pat, who has iron-fist rules, answers, ‘You are on the plane. You are with this team.’ You can’t hold up the whole team because you and your mom and your posse want to spend an extra night in Cleveland. … I do know LeBron likes special treatment. He needs things his way.”

Not even Michael Jordan — arguably the greatest athlete of all time — whom Phil Jackson coached for almost a decade, could challenge his team’s travel itinerary.

Pat Riley may have won the battle, but his victory was pyrrhic.¹¹

When LeBron returned to the Cavaliers, he doubled the value of the Cavs franchise.¹²

In an age where stars — not teams — are in power, LeBron can do things his own way.

Today, the NBA is led by a clever social media usage and a roster of shining stars with worldwide appeal. That, though, wasn’t always the case.

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Return to History: The NBA’s Media Struggles

In lieu of the NBA’s recent success, it’s easy to forget how intensely the NBA once struggled.

As Bill Simmons recounted in The Book of Basketball: The NBA According to The Sports Guy, the NBA was once on life support.

In 1978, the league was sick. It was plagued by a lack of excitement, crippling cocaine abuse, and flimsy relationships with the media. Moreover, the league suffered from tape-delayed playoff games, declining attendance and dull stars whom fans couldn’t get excited about.

Falling into a desperate tailspin, the NBA needed its stars. But Bill Walton was absent and Julius Erving lacked shine.

The NBA was invisible — overshadowed by popular television shows like The Incredible Hulk, The Dukes of Hazard and Dallas. Television networks weren’t helping.

The relationship between the NBA and CBS had deteriorated. Despite exclusive rights to the Eastern and Western Conference Finals, CBS only showed three games live; they broadcast another three games on tape delay but ignored the other four. Only a fraction of markets had live coverage of the NBA Finals, leading to some of the lowest-rated NBA Finals in history. Airing Finals games on tape-delay was a slap in the face; a testament to the league’s cultural irrelevance.¹³

So read a 1979 Sports Illustrated headline: “There’s an Ill Wind Blowing for the NBA. Attendance is Slipping and the League’s TV Ratings Have Plummeted.”

League leadership was embarrassed and in trouble.

Circumstances began to change in the 1980s when the stars saviors came along: Bird ignited the Celtics, Magic Johnson injected a spirited pulse into a sleepy Lakers franchise, and Chicago’s tailspin ended when Michael Jordan saved them five years later.

Then came ESPN and cable television. The networks amplified the already dazzling intensity of the NBA’s stars. Viewers flocked to their living rooms in awe and admiration as the NBA attracted national attention.

Fueled by big budget networks and the greatness of its coveted athletes, the NBA’s popularity has exploded.¹⁴

Today, the NBA is magnetic. Through vibrant expression, athletes march with pizzazz and reveal their multidimensional nature.

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NBA Fashion: A Turbulent History

The NBA’s love affair with fashion is an accident of history.

In the late 1970s and early 1980s, the NBA worried it was losing popularity because it was too black, and in 2005, the league instituted a dress code to distance itself from Hip-Hop culture.¹⁵

As The Business of Fashion noted:

“The [fashion] movement was, in part, spurred by a “business casual” dress code implemented by former NBA commissioner David Stern in 2005, requiring sidelined players to wear a sport coat, dress shoes and socks to games, and for all players to wear business casual attire — or “neat warm-up suits” — while leaving the arena or conducting any sort of NBA-related business.

Banned items included t-shirts, headgear (such as do-rags), sunglasses worn indoors and metal chains… While there was some backlash to these guidelines from players, some of whom felt the rejection of so-called “urban” gear had racial implications, most embraced the change… The NBA is known as the most fashionable sports league in North America, but it mostly fell ass-backwards into this reputation.”

While Commissioner Stern’s push to clean up the NBA’s “thuggish image” initially caused a furor, athletes have turned the culturally insensitive policy into a colossal point of leverage.

In retrospect, Stern’s controversial decision sent the league in a new direction: a direction where stars like Russell Westbrook could be expressive and entrepreneurial.

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Russell Westbrook

No NBA star is more synonymous with fashion than Russell Westbrook. In the off-season, you’re as likely to find Westbrook in a boutique shop in Milan as you are in the gym.

In 2012, during the NBA finals against the Miami Heat, Westbrook arrived at a press conference dressed in a flashy Prada shirt and lensless, firetruck red “nerd glasses.” Westbrook’s press conference had a sudden, seismic impact on the NBA.

Westbrook grew up with two passions: fashion and basketball.

As a kid, growing up in Compton and shopping with his mother, Westbrook dreamed of one day running his own fashion empire.

Through fashion, Westbrook expresses himself and stays true to his inner-city roots.

Today, Westbrook blends high and low fashion, pairing haute with H&M and basics with Barneys. Along with Barneys, Westbrook’s teamed up with premier designers to launch his own brands — Russell Westbrook XO. Westbrook even brought Jordan Brand (owned by Nike) to Barney’s upscale clientele with personality-infused, Westbrook-designed pieces such as a $500 white flight suit.

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Naked Brands

Until now, we’ve been building up to our central theme: the rise of Naked Brands in basketball.

On social media, NBA players can bypass the mainstream media and build intimate, one-to-one relationships with their fans. Fans have always craved a more intimate connection with their favorite athletes.

Athletes are mere clicks away at all times. On Instagram, athletes appear next to friends and family, and on Twitter, athletes showcase their humanity through humor, candor, and when we’re lucky… trash talk.

On the court, stars transcend the teams they play for. Off the court, athletes are using their influence to launch companies and start their own businesses.

On social media, people want to connect with people — not companies. Likewise, people increasingly want to connect with stars — not teams.

NBA stars — like LeBron James — are Naked Brands.

Naked Brands are enabled by social media, powered by personality, and built for the digital age. Naked Brands capitalize on broader generational shifts and a transformation in how digital natives relate to their favorite brands and athletes.

In the modern age, fans don’t just follow their favorite athletes to watch them play. Fans demand more; from transparent relationships with athletes, to exclusive merchandise, to firm stances on social issues. It’s only a matter of time before athletes start their own YouTube vlogs. In return, fans will support them beyond ticket sales by supporting off-the-court initiatives as well.

If history is any indication, Naked Brands are inevitable.

Writing in Understanding Media, Marshall McLuhan — universally regarded as the father of communications and media studies — wrote:

“Societies have been shaped more by the nature of the media by which men communicate than by the content of the communication… All media works us over completely… and leaves no part of us untouched, unaffected, and unaltered. The medium is the message.”

McLuhan observed that communications technologies shape the structure of society. We do not merely use technology — it reinvents us.

As humans develop new ways of communicating, the role of athletes will inevitably change. Shifts in fandom are catalyzed by shifts in media consumption.¹⁶

On social media, NBA stars have more reach than the outlets that cover them. On Instagram, LeBron James has 38 million followers, but ESPN has only 10 million. LeBron — not ESPN — sways the narrative, and through social media, he maintains one of the largest media outlets in the world.

Whether or not LeBron is remembered as the greatest player of all time, his reach off the court is as valuable as his dominance on it. LeBron’s career won’t end when LeBron retires.

His social media channels will only increase in value, and even after his playing days are over, LeBron will continue to capitalize on his influence. Basketball is a business, and social media has extended LeBron’s career far beyond basketball.¹⁷

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LeBron James — A Media Mastermind

LeBron’s career has paralleled the rise of social media.

As his play on the court has matured, so has his social media usage.

Once he retires, expect LeBron to extend his brand into movies, music and everything in between. Propelled by global reach and influence, LeBron will surpass Michael Jordan’s off-the-court achievements. In some ways, LeBron’s media company, SpringHill already has:

“SpringHill, named for the Akron projects where James lived until his rookie year, is attempting to win a harder game. Consider: Two decades ago, when Jordan was making Space Jam, he leveraged his celebrity to get Warner Bros. to erect an outdoor court for him and his buddies to use between takes.

Eighteen months ago, James and Carter persuaded that same studio to ink them to an overall production deal — for film, television and digital video — that Warner Bros. called unprecedented in scope. A few months after that, Warner Bros. and Turner Sports invested $15.8 million into Uninterrupted.”

With more than 60 million followers between Twitter and Instagram, LeBron can make a message go viral with just a handful of taps.

Perhaps there is no better example of a Naked Brand than Beats by Dre — founded by Dr. Dre, personified by LeBron James and acquired by Apple for $3 billion in 2014.

Beats By Dre — An Iconic Naked Brand

Why is that lowercase “b” so cool?

James and Dr. Dre met through their shared financial adviser, Paul Watcher. They initially met to discuss a documentary film project. At the time, Dr. Dre was developing the Beats headphones and knew about James’ fervor for music.

An ascendant cultural icon, James was the perfect Beats influencer. Beats, founded by Dre, was one of the original Naked Brands. Established at the dawn of the social media era, in his quest for cool, Dre recognized the magnetic pull of athletes.¹⁸

Anticipating the power of personalities to shape culture, Dre’s business partner Jimmy Iovine — a marketing mastermind — seized an opportunity. Here’s the story of the rise of Beats By Dre:

“Iovine gave a prototype of Beats Studio headphones to James’ manager, Maverick Carter, to pass to James while he trained for the 2008 Olympics. James asked for more, to outfit the entire U.S. Olympic basketball team before it left for Beijing.

The hype was immediate. TMZ noted that Dr. Dre “influenced the USA Olympic basketball [team] as much as Dr. J.” Other media coverage followed. So did queries from other athletes, James says. “I started hearing from people who wanted to know: What are they? Where did I get them? What’s that ‘b’?

Then they asked how they could get their own.

The rest of Beats’ explosion is history.

With the bass turned up to 10, Beats by Dre are headphones on steroids. They’re deafening. And the best part is that headphones no longer look like medical equipment. No. Beats are party headphones, and despite their subpar audio quality, Beats dominate the premium headphone market.

In less than five years, Beats went from zero to full-blown cultural phenomenon. To wear a pair of Beats is to wear a piece of Dr. Dre and all the stars who’ve covered their ears with the iconic lowercase “b.” It’s as if each note — each beat — has been tweaked and tuned by Dr. Dre’s veteran ears.

Today, Beats By Dre is as “Naked” as they come — keeping in close contact with armies of athletes offering customized, new design styles for Beats based on conversations with top athletes from every corner of the globe.

Beats aren’t just headphones. They’re fashion accessories — a symbol of cool. Beats’ role as a cultural insignia is a testament to the soaring influence of NBA athletes.

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Basketball: Made for Naked Brands

“Naked Brands” and basketball are a match made in heaven.

Unlike football where players have helmets over their faces, or in baseball where players wear hats, NBA players are fully visible to fans. They wear shorts and tank-top jerseys. The emotions, tattoos, and faces of players are clear and exposed.

Juliet Litman, the managing editor at The Ringer, said it best:

“It’s so much easier to feel like you know a basketball player than it is to feel like you know a baseball player. In concert with the league and through their own brute force, they have carved out a niche where they are legit celebrities and they are their own brand.”

The intimacy extends to the live fan experience. NBA stars are used to proximity. Fans who sit court-side are just a couple of feet away from the action on and off the court. Moreover, basketball stars are active on both offense and defense and play most of the game.

The proximity translates well to social media, where fans flock towards honest, transparent voices and personas.

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Naked Brands: The Future of Basketball

The triumph of Naked Brands and the popularity of LeBron James remind us of the burgeoning allure of transparency and the appeal of animated characters.

Social media is where personality glows. In a world of boundless media choice and TV on demand, LeBron cuts right through the clutter.

This day in age is all about the individual. The future of sports is about the athletes themselves, not the teams they play for.

LeBron is “The King.” He’s a human billboard — a walking advertisement, once worth almost $500 million to the city of Cleveland.

In Los Angeles, LeBron won’t just be an athlete. Propelled by reach and influence, LeBron will become an entrepreneur, movie star, and real estate mogul. It’s not about legacy, it’s about business; it’s not about basketball, it’s about Hollywood; it’s not about the Lakers, it’s about Los Angeles.

On the court, LeBron is at his peak. But off the court, his career is set to explode. 

The NBA’s Golden Era began with The Decision.

The Decision marked a shift from the days of teams to the days of stars.

These stars — these Naked Brands — are here to stay.

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Acknowledgments 

Thank you to Alex Hardy, Zander Nethercutt, Web Barr and Matt Nelson for help with this post.

Cover image source: Wikimedia Commons

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Footnotes

¹ ESPN gave away the airtime to LeBron.

Consider the NFL, where players have to watch their words. In the words of Minnesota Vikings punter Chris Kluwe, who was let go from the team after advocating for marriage inequality, there are two things you don’t talk about in the NFL: politics and religion.

² Ratings rose 19 percent in 2017. So, too, is attendance: more than 22 million fans flooded an NBA arena during the 2017 regular season. NBA League Pass subscriptions climbed 10 percent, and website visits increased by 27 percent.

³ This behavior began on Vine, a short-form video hosting service where users could share six-second long looping video clips.

The home of NBA highlights, Vine was a noun, a verb, and, advective and a platform.

On Vine, NBA slam dunks spread like wildfire. The NBA became the first sports league to accumulate 1 billion loops on Vine.

The 1,020,171,853 Vine loops for the NBA at press time is more than 230 million more loops than the 788,125,035 Vine loops Major League Baseball, the National Football League, and the National Hockey League have accumulated, combined.

Vine was owned and later shut down by Twitter. In it’s wake emerged NBA Twitter and popular, basketball-focused Instagram accounts like House of Highlights.

⁵ Compare this statistic with other American sports leagues. Data from Sports Business Journal and Magna Global states the following.

• 57: Average age of baseball viewers in 2016

• 50: Average age of football viewers in 2016

• 42: Average age of basketball viewers in 2016

⁶ Source: Bleacher Report

⁷ Even today, under the current NBA TV deal, only 164 of the league’s 1230 games air on national television (ESPN/ABC or TNT).

⁸ The league streams also streams NBA2K games on Twitch.

⁹ Source: Forbes. The top 12 will all earn at least $7.5 million. Besides endorsements, these payments include licensing, memorabilia, appearances, and media deals. Shoe companies drive the bulk of these revenues.

¹⁰ Between 1997 and 2009, only three in-their-prime superstars changed teams during free agency. Grant Hill, Tracy McGrady and Steve Nash are the notable exceptions. As Bleacher Report noted:

“Even then, there were caveats. McGrady had not yet blossomed into a star when he left Toronto for Orlando. Nash only left Dallas for Phoenix because the Mavericks balked at his salary demands.”

¹¹ During his stint in Miami, LeBron forced Heat General Manager Pat Riley to pay a steep luxury tax to keep him.

¹² Source: Less is More?, Marginal Revolution

¹³ One of the most famous basketball games ever played (with Magic Johnson starting at center in place of an injured Kareem Abdul-Jabbar and carrying the Lakers to the title with an infamous 42-point game), Game 6 of the 1980 NBA Finals was shown well after midnight in nearly every American city. Only four markets carried the game live.

¹⁴ Sure, there have been hiccups. Many of them, actually. But the point still stands.

For further reading on the 1970s NBA’s cocaine, I recommend this article: How the NBA Climbed Mountains Through an Era of Outlandish Proportions.

¹⁵ Here’s the direct quote from the New York Times:

“This is the same N.B.A. that in the late 1970s and early 1980s worried that it was losing popularity because it was too black. This is the same N.B.A. that in 2005 instituted a dress code to distance itself from hip-hop culture.”

¹⁶ The NBA’s gambling policies are just as progressive, another example of Adam Silver’s brilliance.

Here’s Adam Silver in a recent interview:

“In the U.S., the estimates range from $100 billion to $400 billion in illegal sports betting annually. It became clear to me that we would be better off with a regulated framework of sports betting, rather than having it all be illegal and unmonitored. And the intellectual property creators like the NBA, which invest billions of dollars per year creating their product [$7.5 billion in 2018 alone], should share in the proceeds. Legalized sports betting creates an opportunity to be compensated directly by selling our video and data.

Regulated betting can lead to a dramatic increase in engagement. Virtually all of the legal betting outside the United States has moved to what they call in-play. People are making various proposition bets throughout the game: the number of points in a quarter, number of points in a quarter for a particular player, number of three-point shots. Legalized sports betting in the U.S. could lead to a dramatic increase in engagement. And we can better protect the integrity of the league by being able to monitor it.”

¹⁷ The NBA has a history of stars succeeding after they’ve retired: Magic Johnson is a business tycoon, Michael Jordan owns the Charlotte Hornets, and Kobe Bryant is an aspiring director.

¹⁸ Enjoyed this comment from a reader: “Nike committed to individualizing athletes in the late 80’s. Nike introduced “Air Jordans” other clothing lines based on aspirational sports personalities, as they expanded their line… Air Jordan’s sold for $250 back then when regular sports shoes sold for $30…. Also, these shoes drifted very fast into mainstream streetwear for off-the-court fashion.”

Sam Walton changed retail forever. 

The founder of Wal-Mart, created more wealth in the 20th century than almost anybody else. 

At one point, Sam Walton was the richest man in America.

Today, Wal-Mart is a company of astounding size. It’s an essential element of rural life in America — a one-stop shop for all our essential goods. 

Some statistics about Wal-Mart, taken from Sam Walton: Made in America, an autobiography of Sam Walton, the founder of Wal-Mart. 

“Every week, nearly 40 million people shop in Wal-Mart. Last year, we sold enough men’s’ and women’s underwear and socks to put a pair on every person in America, with some to spare. 

We sold 135 million men’s and boys’ briefs, 136 million panties, and 280 million pairs of socks. We sold one quarter of all the fishing line purchased in the U.S., some 600,000 miles of it, or enough to go around the earth twenty-four times. 

We sold 55 million sweatsuits and 27 million pairs of jeans, and we sold almost 20 percent of all the telephones bought in the U.S. And here’s one I’m really proud of: in one week last year, we sold as much Ol’ Roy private label dog food as we did in all of 1980. With sales of $200 million last year, Ol’ Roy became the number-two dog food in America, and remember, we only sell it in Wal-Mart. 

Another one: Procter & Gamble sells more product to Wal-Mart than it does to the whole country of Japan.”

Mind-bending. 

How did Wal-Mart grow so large? Why did the company succeed? What can we learn from Sam Walton’s success? 

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Rising Up the Retail Ranks

Some history. 

Walton’s first foray into retail was a stint at J.C. Penny, where he worked as a management trainee and earned $75/month. 

After leaving the military, Walton took over management of his first variety store in 1945, at the age of 26. Aided by a $20,000 loan from his father-in-law and $5,000 he had saved from his time in the Army, Walton purchased his first variety store in Newport, Arkansas. The store was called Ben Franklin. At the time of purchase, the store earned $80,000 per year. With Walton at the helm, the store grew fast to $225,000 in revenue in just three years. 

Stocked with a wide range of goods, both stores grew fast. As Walton made money in one store, he’d invest in another. 

Walton was known for his fierce competitiveness. He didn’t care about being right; he cared about winning retail. Walton was so obsessed with retailing that he wasn’t worried about destroying his old beliefs if he found new evidence that contradicted it.

“Business is a competitive endeavor, and job security lasts only as long as the customer is satisfied. Nobody owes anybody else a living.”

With fire and fury, Walton made the best of low-margins. 

Walton family members managed inventory, checked in freight, and ran between stores to move product that was not selling from one store to another. Profit from one store was re-invested in another one. 

Just fifteen years after its founding, Walton had become the largest independent variety store operator in the United States. Walton wrote: 

“[Even then] the business itself seemed a little limited. The volume was so little per store that it really didn’t amount to that much. I mean, after fifteen years—in 1960—we were only doing $1.4 million in fifteen stores.”

Walton hesitated to spend unnecessary money. He played it close to the belt, never doing anything in size or volume unless he had to. 

As Wal-Mart grew, so did Walton’s debt:

“It’s true enough that I was nervous about spending any unnecessary money in those days. We were generating as much financing for growth as we could from the profits of the stores, but we were also borrowing everything we could. I was taking on a lot of personal debt to grow the company—it approached $2 million, which was a lot of money at the time. The debt was beginning to weigh on me.”

Only then did Walton learn about the advantages of large stores. Walton called them “Family Centers.” They earned $2 million per year in sales per store, which was unthinkable for small towns at the time. 

Eager to expand his operations, Walton turned his attention to Wal-Mart. While “Ben Franklin” only discounted some of their items, Wal-Mart would discount everything. Wal-Mart’s brand would be built on low prices. 

At the beginning, Wal-Mart company struggled to raise money. Since nobody wanted to gamble on the first Wal-Mart, Walton borrowed vast sums of money and put up 95 percent of the dollars. 

Since its founding, Wal-Mart has been driven by two maxims — both of which still guide the company today: (1) “We Sell for Less” and (2) “Satisfaction Guaranteed.”

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Improvement: A Daily Ritual

David Glass, who would later replace Sam Walton as CEO of Wal-Mart, described Walton’s commitment as such: 

“Two things about Sam Walton distinguish him from almost everyone else I know. First, he gets up every day bound and determined to improve something. Second, he is less afraid of being wrong than anyone I’ve ever known. And once he sees he’s wrong, he just shakes it off and heads in another direction.”

Walton soaked up wisdom from everybody he could — from competitors to Wal-Mart’s entry-level associates. 

He stalked competing retailers, borrowed their best ideas and incorporated the lessons into Wal-Mart’s ethos. 

Walton was only concerned with what his competitors were doing right — not what they were doing wrong. Walton believed he could learn from every store and every employee. 

In the words of one Wal-Mart associate:

“When he meets you, he looks at you—head cocked to one side, forehead slightly creased—and he proceeds to extract every piece of information in your possession. He always makes little notes. And he pushes on and on. After two and a half hours, he left, and I was totally drained. I wasn’t sure what I had just met, but I was sure we would hear more from him.”

As Wal-Mart grew, Walton expanded his domain of exploration. During a trip to Brazil, Walton was impressed by the giant Carrefours stores. Seeing the Brazilian chain inspired Walton to launch an experiment called Hypermart — giant stores with groceries and general merchandise under one roof. 

By the time Walton returned to America, he was eager to launch the newfound Hypermart initiative. 

Walton writes:

“I argued that everybody except the U.S. was successful with this concept and we should get in on the ground floor with it. I was certain this was where the next competitive battlefield would be. Eventually, we opened two Hypermarts in the Dallas-Fort Worth area, one in Topeka, and one in Kansas City. By now we had gotten enough respect in the business so that Kmart jumped right in behind us with their own Hypermart concept called American Fare.” 

Unexpected challenges emerged as the Hypermart initiative grew:

“Our Hypermarts weren’t disasters, but they were disappointments. They were marginally profitable stores, and they taught us what our next step should be in combining grocery and general merchandising—a smaller concept called the Supercenter. But I was mistaken in my vision of the potential the Hypermart held in this country. 

We conducted other similar, but less publicized, experiments that didn’t work out so well either. Our dot Discount Drug concept grew to twenty-five stores before we decided it wasn’t going to be profitable enough. And we tried one home improvement center called Save Mor in the building which had housed the original Wal-Mart in Rogers, which was also not a success. As David Glass says about me, once I decide I’m wrong, I’m ready to move on to something else.”

The Hypermart failure did not discourage Walton from launching future experiments. 

The Sam’s Club experiment launched in 1983. In just nine years, Sam’s Club became a $10 billion business with 217 stores around the country. Here’s how Walton describes Sam’s Club:

“Sam’s are big stores in warehouse-type buildings aimed at small-business owners and other customers who buy merchandise in bulk. A membership fee entitles a customer to shop at Sam’s, which charges wholesale prices for name-brand, often high-end merchandise—everything from tires to cameras to watches to office supplies to cocktail sausages and soft drinks. If you’ve never been in one, they’re a lot of fun to shop, and the people who work there are a little crazy. Like the old days at Wal-Mart, they’re liable to do anything on a moment’s notice to move the merchandise.”

Sam’s Club is a straightforward business with no advertising. The whole marketing team simply sells the Sam’s Club concept. For $25 per year, small businesses can access a just-in-time warehouse with all the same price advantages that large companies receive.  

Sam’s Club and Wal-Mart were separate businesses, each with a different management team. Even as Sam’s Club went upmarket, Wal-Mart doubled down on low prices and low margins. 

Low Prices

Walton’s philosophy of Wal-Mart is simple: sell the highest quality goods at the lowest possible prices. Frugality is built into Walton’s DNA. 

Walton was a child of the Great Depression. Since money was tight during the 1930s, Walton performed chores to make financial ends meet. 

In the mornings, Walton milked the family cows. Once the milk was bottled, Walton took on his next job. He worked as a newspaper boy for the Columbia Daily Tribune and sold magazine subscriptions in his spare time. 

Walton’s appreciation for the value of a dollar was crucial for Walmart’s success:

“I’m asked why today, when Wal-Mart has been so successful, when we’re a $50 billion-plus company, should we stay so cheap? That’s simple: because we believe in the value of the dollar. We exist to provide value to our customers, which means that in addition to quality and service, we have to save them money. Every time Wal-Mart spends one dollar foolishly, it comes right out of our customers’ pockets. Every time we save them a dollar, that puts us one more step ahead of the competition—which is where we always plan to be.”

Walton’s commitment to frugality allowed him to beat big variety stores, even when the odds were against him. 

When Wal-Mart would arrive in a new town, customers would flock to Wal-Mart instead of the traditional variety stores. In response, these variety stores eventually converted to discounting. 

Existing variety stores were unable to compete with Wal-Mart’s frugal ethos:

“Kuhn’s Big K became a discount chain. Sterling launched its Magic Mart discount chain. And Duckwall went into discounting. On paper we really didn’t stand a chance. What happened was that they didn’t really commit to discounting. They held on to their old variety store concepts too long. They were so accustomed to getting their 45 percent markup, they never let go. It was hard for them to take a blouse they’d been selling for $8.00, and sell it for $5.00, and only make 30 percent. With our low costs, our low expense structures, and our low prices, we were ending an era in the heartland. We shut the door on variety store thinking.”

Variety stores were unable to compete with Wal-Mart’s scale advantages. 

By increasing their volume, Wal-Mart lowered prices; by lowering prices, they increased market share, and by increasing market share, they built structural advantages which allowed this virtuous cycle to perpetuate. 

Here’s Walton:

“If you’re interested in “how Wal-Mart did it,” this is one story you’ve got to sit up and pay close attention to. Harry was selling ladies’ panties—two-barred, tricot satin panties with an elastic waist—for $2.00 a dozen. We’d been buying similar panties from Ben Franklin for $2.50 a dozen and selling them at three pair for $1.00. Well, at Harry’s price of $2.00, we could put them out at four for $1.00 and make a great promotion for our store. 

Here’s the simple lesson we learned—which others were learning at the same time and which eventually changed the way retailers sell and customers buy all across America: say I bought an item for 80 cents. I found that by pricing it at $1.00 I could sell three times more of it than by pricing it at $1.20. I might make only half the profit per item, but because I was selling three times as many, the overall profit was much greater. Simple enough. 

But this is really the essence of discounting: by cutting your price, you can boost your sales to a point where you earn far more at the cheaper retail price than you would have by selling the item at the higher price. In retailer language, you can lower your markup but earn more because of the increased volume.”

Underfinanced and undercapitalized, Wal-Mart’s culture of frugality was born out of necessity. To Walton’s surprise, he discovered that there was much, much more business in small-town American than anybody — including Walton — had ever dreamed of. 

Low prices were Wal-Mart’s number one goal. To achieve them, everybody worked like crazy to keep expenses low — never paying more than $1 per square foot in rent.

In the name of low prices, Wal-Mart’s early stores were unprofessional and didn’t look good. Neither did it’s Bentonville, Arkansas headquarters.

To keep prices low, Walton had to control expenses better than his competition: 

“This is where you can always find the competitive advantage. For twenty-five years running—long before Wal-Mart was known as the nation’s largest retailer—we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.”

To improve efficiency, Walton focused on a single metric: ratio of sales to inventory. 

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Ratio of Sales to Inventory

Walton preached the importance of “swimming upstream.” That tendency, Walton believed, was a secret to Wal-Mart’s success. 

In its early years, Wal-Mart operated primarily in small, remote communities. 

At the time, during the 50s and 60s, America was changing fast. Wal-Mart’s success didn’t take place in a vacuum. 

“All the kids who had grown up on farms and in small towns had come home from World War II or Korea and moved to the cities where all the jobs were. Except they weren’t really moving to the cities; they were moving to the suburbs and commuting into the cities to work. It seemed like every family had at least one car—and many had two—and the country had started building its interstate highway system, all of which changed a lot of the traditional ways Americans were accustomed to doing business. The downtowns of big cities started to lose population and business to the suburbs, and the big downtown department stores had to follow their customers and build branch stores out in the suburban malls.”

This spawned a whole host of car-oriented chains:

“Traditional diners and cafés suffered because of the new car-oriented chains like McDonald’s and Burger King, and the old city variety stores like Woolworth’s and McCrory’s just got smashed by Kmart and some of the other big discounters. The oil companies stuck service stations on practically every other corner, and pretty soon something called convenience stores—7-Elevens and such—came along and started filling up the other corners.”

Wal-Mart’s success attracted competitors. 

To differentiate itself against the rising competition, Wal-Mart took control of its distribution and logistics channels. This vertical integration gave the company a competitive advantage over competitors that relied on third-party suppliers. 

To increase Wal-Mart’s competitive edge, Walton minimized its ratio of sales to inventory.

Walton writes: 

“The gap from the time our in-store merchants place their computer orders until they receive replenishment averages only about two days. That probably compares to five or more days for a lot of our competitors, which don’t ship as much merchandise through their own network. The time savings and flexibility are great, but the cost savings alone would make the investment worthwhile. Our costs run less than 3 percent to ship goods to our stores, while it probably costs our competitors between 4 ½ to 5 percent to get those same goods to their stores. The math is pretty simple: if we both sell the same goods for the same price at retail, we’ll earn 2 ½ percent more profit than they will right there.”

By controlling distribution and logistics channels, Wal-Mart shortened its lead times and broke away from its competition. 

Through vertical integration, Wal-Mart could offer lower prices and continue to earn a profit — both of which gave Wal-Mart a sustainable competitive edge. 

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The 2% Rule: Avoid Bureaucracy and Decentralize

As Wal-Mart expanded across America, Walton could no longer manage the everyday details of the business. 

New stores meant new employees and new employees meant new challenges. 

Walton began to fear bureaucracy. Walton instructed his employees to keep the company lean. Otherwise, expenses would multiply as the pace of progress slowed. 

To fight bureaucracy, Wal-Mart kept below a 2 percent general office expense structure. 

As Walton instructed: 

“2 percent of sales should have been enough to carry our buying office, our general office expense, my salary, Bud’s salary—and after we started adding district managers or any other officers—their salaries too. Believe it or not, we haven’t changed that basic formula from five stores to two thousand stores. In fact, we are actually operating at a far lower percentage today in office overhead than we did thirty years ago, and that includes tremendous expenses for computer support and distribution center support—though not the actual cost of running the distribution centers. Really, it includes everything that we supply centrally in the way of support for the stores.”

I call this the “2% Rule.”

Walton held a strong belief in the importance of pushing down responsibility and authority. 

Walton continues: 

“The bigger we get as a company, the more important it becomes for us to shift responsibility and authority toward the front lines, toward that department manager who’s stocking the shelves and talking to the customer. When we were much smaller, I probably wasn’t as quick to catch on to this idea as I should have been.”

Walton continues: 

“Anytime a company grows as fast as Wal-Mart has, pockets of duplication are going to build up, and there will be areas of the business which we may no longer need. No boss or employee really likes to dwell on such matters: it’s only human nature not to want to have your job, or the jobs of the people who work for you, eliminated.”

As Wal-Mart localized decision making, individual stores earned autonomy. This allowed Wal-Mart to control its expenses better than its competitors. 

Here’s Walton: 

“For twenty-five years running—long before Wal-Mart was known as the nation’s largest retailer—we ranked number one in our industry for the lowest ratio of expenses to sales. You can make a lot of different mistakes and still recover if you run an efficient operation. Or you can be brilliant and still go out of business if you’re too inefficient.”

Walton’s obsession with efficiency inspired the store within a store initiative:

“In Store Within a Store we make our department heads the managers of their own businesses, and in some cases these businesses are actually bigger in annual sales than a lot of our first Wal-Mart stores were. 

We share everything with them: the costs of their goods, the freight costs, the profit margins. We let them see how their store ranks with every other store in the company on a constant, running basis, and we give them incentives to want to win. We’re always trying for that fine balance between autonomy and control. 

Like any big retailer, Wal-Mart obviously has certain procedures which we require our stores to follow or items they must stock. But we have taken steps to make sure our stores have some autonomy.”

Wal-Mart executives were surprised by the diversity of shopping patterns across the Wal-Mart network: 

“We have to do [focus] store by store, department by department, customer by customer, associate by associate. For example, we’ve got one store in Panama City, Florida, and another only five miles away in Panama City Beach, but actually they’re worlds apart when it comes to their merchandise mix and their customer base. They’re entirely different kinds of stores. 

One is built for tourists going to the beach, and the other is more like the normal Wal-Mart, built for folks who live in town. That’s why we try our best to put a merchant in charge of each store, and to develop other merchants as the heads of each department in those stores. If the merchandise mix is really going to be right, it has to be managed by the merchandisers there on the scene, the folks who actually deal face to face with the customers, day in and day out, through the seasons.”

Wal-Mart’s strategy of pushing down responsibility was nested within a more important mantra: focus on the customer. 

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Focus on the Customer

Walton credits Wal-Mart’s focus on the customer as the most important single ingredient of Wal-Mart’s success. 

Walton believed that companies who don’t think about the customer and focus on their interests will get lost in the shuffle — if they haven’t already. Those who are greedy will be left in the dust, he says. 

Describing Sam Walton, Roberto Goizueta, the Chairman, and CEO of Coca-Cola once said: 

“Sam Walton understands better than anyone else that no business can exist without customers. He lives by his credo, which is to make the customer the centerpiece of all his efforts. And in the process of serving Wal-Mart’s customers to perfection (not quite perfection, he would say), he also serves Wal-Mart’s associates, its share owners, its communities, and the rest of its stakeholders in an extraordinary fashion—almost without parallel in American business.”

To Walton, everything is done on behalf of the customer. 

Take negotiation; Walton writes:

“There’s a difference between being tough and being obnoxious. But every buyer has to be tough. That’s the job. I always told the buyers: ‘You’re not negotiating for Wal-Mart, you’re negotiating for your customer. And your customer deserves the best price you can get. Don’t ever feel sorry for a vendor. He knows what he can sell for, and we want his bottom price.’ 

And that’s what we did, and what Wal-Mart still does. We would tell the vendors, ‘Don’t leave in any room for a kickback because we don’t do that here. And we don’t want your advertising program or your delivery program. Our truck will pick it up at your warehouse. Now what is your best price?’ And if they told me it’s a dollar, I would say, Fine, I’ll consider it, but I’m going to go to your competitor, and if he says 90 cents, he’s going to get the business. So make sure a dollar is your best price.’ 

If that’s being hard-nosed, then we ought to be as hard-nosed as we can be. You have to be fair and upfront and honest, but you have to drive your bargain because you’re dealing for millions and millions of customers who expect the best price they can get. If you buy that thing for $1.25, you’ve just bought somebody else’s inefficiency.

We used to get in some terrific fights. You have to be just as tough as they are. You can’t let them get by with anything because they are going to take care of themselves, and your job is to take care of the customer.”

Wal-Mart keeps its prices as low as possible by keeping its costs as low as possible. 

Everything flows back to Walton’s lifelong obsession: serving the customer. 

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Note: Sam Walton: Made in America is the source for all information above.

An interview I did with Sar Haribhakti

This is the fourth interview in Sar’s Not So Entitled & Lazy Interview Series.

Sar writes: “As always, we connected on Twitter. I came across him when he was about to join Cycle Media in 2016 after graduating from college. I loved Cycle’s creative work, and I worked with them for a few months in 2017. Our conversations around our mutual respect for Cycle’s work have transpired into a friendship now.

David is a learning machine, a phenomenal writer, and a podcaster. It is difficult to not feel inspired after having a little chat with him. I encourage everything to check out his website, which is a beautifully designed place where he consolidates his blog posts, tweetstorms, podcast episodes and book reviews. I once spent a couple hours over a weekend binge-reading everything.

In this interview, he talks about Naked Brands, a phrase he has coined, how he filters what he reads, how he prepares for his podcast interviews, his thoughts on future of sports and media in America, what he disagrees the most with adults on and much more.”

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What do you do for work?

I’m the founder of North Star Media and lead multiple projects under the North Star umbrella.

Education is the best kind of marketing.

At North Star Media, we help companies communicate their vision, create content and build a following. We work with clients to produce original content, such as articles, podcasts, and videos.

Companies that can create information-rich, entertaining content earn attention, generate trust, and develop an impenetrable network.

Our clients predominantly work in sports, investing and cryptocurrencies.

I also host the North Star Podcast. I interview guests who live with joy, learn passionately, and see the world through a unique lens. I’ve spoken with scientists such as Neil deGrasse Tyson, marketers like Seth Godin, venture capitalists like Albert Wenger, and investors like Ari Paul.

You have a phenomenal blog where you write thoughtful book reviews and your Naked Brands series. What do you mean by Naked Brand and give us an overview of how it applies across fields.

“Naked Brands” is a term I coined last year.

Naked Brands are founded by influencers, built on transparency, and prize ongoing communication with fans and customers. Their brands are defined not by symbols, logos, or television advertisements, but by the authenticity of their personalities.

Today, fans don’t just want to support favorite brands. They want to establish emotional connections with them. They want to shape their evolution and establish intimate connections with people who inspire them.

After college, I worked at Cycle on their business development team. At Cycle, we had a saying: “people are media companies.”

For the first time in history, athletes, politicians, and entertainers can reach their audiences directly.

Many of them have a more significant reach than newspapers like The New York Times or TV stations like ABC. LeBron James has 37 million Instagram followers; ESPN has 10 million. Beyonce has 114 million Instagram followers; MTV has 9 million.

This is a massive shift. Ten years ago, none of this existed. It’s a new world now, and we’re still in the early innings.

After leaving Cycle, I read Marshall McLuhan’s Understanding Media. McLuhan taught me how new technologies transform knowledge, restructure society, and shape the character of culture. From the wheel to the printing press, to the car, to the radio, this theme runs the course of history.

You run a great podcast. I’m a big fan of not only most of the guests you have had on it but your interviewing style. Tell us how you go about picking your guests and doing your homework before each interview.

I love to learn — I love it.

Before each interview, I ask guests to send me a list of books, people, experiences, and ideas that have shaped their worldview. I secretly have the world’s best reading list!

Once I receive the list, I prepare like crazy.

I’ll read their favorite books, listen to their favorite podcasts, and learn about their favorite people.

As a general rule: the more diverse and obscure the list, the better the interview.

Once the interview begins, I try to use my notes as little as possible. Since my interview skills still aren’t where I’d like them to be, I write personal notes down before every interview and use the time between interviews to reflect on my performance.

The best conversations happen when people are energetic and relaxed.

As an interviewer, I keep my belly soft which helps me relax. The softer your belly, the more you relax. Try it, it works!

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Anyone who follows you on Twitter can tell that you are an excellent curator of insightful thoughts and quotes on various topics. You curate them and put them into tweetstorms that almost always get widely circulated.

My question is twofold. One, how you do go about aggregating those insights. Is it intentional or you put them all together when you have read enough on a certain topic? Two, can you distill key insights from your threads on career and learning for us?

Ok… it’s time to share my secret sauce.

I have a digital model of my brain, which makes all this possible. It’s the coolest thing!

I save all my knowledge in Evernote. I’ve worked with a coach to develop the system.

I want to live a life where I don’t have to remember anything. Seriously. That’s my goal — to forget as much as possible.

Eventually, I’ll reach a point where all my memories could vanish, and it wouldn’t impact my work. It’s a lofty goal (perhaps unattainable), but I’m moving closer and closer to it every day.

I’m a voracious reader, so I always have an abundance of quality information. Since I don’t have to remember anything, it’s easy to write these threads.

As you mentioned, I recently published a thread on career advice. It went viral. I can’t believe how many people have seen it; the top tweet has more than 600,000 impressions!

My favorite career advice comes from Keith Rabois: “Aim to become not the best at what you do but ‘the only one’ who does what you do.”

As for learning, start with the core principles that govern the field and master those. Across fields, the fundamentals are under-rated.

Most knowledge is a combination of the core principles in an area.

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Are there any trends in blogging that you are excited about?

Yes! The blogging space is about to explode.

Content is essential, especially for B2B companies. It’s the best kind of marketing.

Content helps companies build their network, which can become a competitive edge. Whether you’re an individual or a company, nobody can replace you at the center of your network.

Being the linchpin in a network makes you immune to competition.

At North Star Media, we’re developing a method to remove the friction from content creation.

Organizations everywhere hold tons of knowledge. Unfortunately, most of them don’t know how to store it, organize it, or create content with it. That’s where we come in.

With our system, founders can create lots of content in minimal time. Through content, they can build a following and shape the future of their industry, which has huge ROI for them.

I’m psyched about what we’re building.

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I am going to pull a Thiel now. What one thing do you disagree the most with adults on? I know any, and every answer would make a generalization on a how a group of people think but we are lazy and entitled anyways so they can cut us some slack on this.

Good question, Sar!

This idea was inspired by Dan Wang, who I recently had lunch with in Hong Kong.

The vast majority of science fiction is dystopian and negative. People underestimate how much this hurts economic growth and technological expansion.

To innovate, we need to be inspired to do so. Innovation is more likely when people are given inspiring visions of potential futures.

We don’t need utopias, but we do need hope and enthusiasm. That’s where Science Fiction helps — it injects people with imagination.

There are other ways to improve our capacity for imagination: museums, music festivals, conversations with inspiring people, and tours of exciting places. But there’s friction in all these solutions.

Science fiction has fewer constraints. Almost everybody is influenced by fictional stories. And because of that, movies and TV are potent levers to pull.

These days, stories about the future tend to have a dystopian, nihilistic bent. I recently saw Ready Player One, which describes a cruel world that I don’t want to live in. In the summer of 2015, I read The Circle, which also haunted me.

It’s become contrarian to be positive about the long-term future. We’ve entered an era of innovation starvation where people have lost faith in a better future. That’s a worrying sign.

Who is writing the book about a world with free, infinite energy? Or the one about a world where 3D printers are as ubiquitous as smartphones?

If anybody’s gonna do it, it’s the Chinese — not the Americans.

The data echoes this idea: right now, the vast majority of Americans see a grim future for the world. Most Americans think the world is becoming worse.

Americans have become complacent. We’re less ambitious and dynamic than we once were. We’re taking fewer risks and starting fewer companies.

I see this complacency in the majority of my college and childhood friends. I can count the number of people among them who are genuinely passionate about something (beyond sports or pop culture) on a single hand.

And they tend to be the privileged ones.

They’re armed with the social and financial capital to make meaningful change in the world. And yet, I see cynicism — not enthusiasm.

Dispassionate about their work, I know far too many people who live for the weekend. And when it arrives, they spend their nights drinking and their days hungover — weekend after weekend after weekend — blind to their potential; numb to our magnificent universe.

That’s not good.

There are exceptions though.

I was struck last summer when I interviewed Josh Wolfe (co-founder and managing director of Lux Capital) and Sam Arbesman (scientist-in-residence at Lux Capital) on my podcast.

There are no superlatives to describe the respect I have for Lux Capital and the firm they’ve built.

Both Josh and Sam are avid science fiction readers. They seek out positive visions of the future. When you speak with them, their belief in a better tomorrow shoots into your soul and melts into your mind.

We need more people like them.

I wish we could shower humanity with their hope, their vision, and their optimism. It’s magical — truly.

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In interviewing so many great people, is there anything you find in common amongst them that is very simple and perhaps sounds too simple to be true?

This answer won’t be popular, but it’s the most honest one I can give.

With a question like this, it’s easy to be fooled by randomness.

The podcast also has a sample bias. I’ve only interviewed successful people. That’s makes it hard to judge cause and effect, so it’s easy to misattribute the roots of their success.

When you look back on your life, it’s natural to construct a coherent narrative that makes sense and sounds good.

Humans love stories and explanations. But if you’re intellectually honest, so much success is a result of chance. A priori the future is uncertain.

But our stories rarely acknowledge the messiness of life. Our memories wash away the subtleties that lead to success.

Life is non-linear and random, unexpected things happen all the time, and that’s why I hesitate to answer this question.

What are your thoughts on the future of sports and media in America?

Societies express themselves through sports. Study a culture’s games, and you can understand its values.

Whenever I travel, I use sports as a lens to learn about where I am. Even if it’s indirect, it’s one of the best ways to learn about a culture and its history.

For example, If you travel to Australia, observe the contrast between the 1956 Olympics in Melbourne and the 2000 Olympics in Sydney. There’s so much to learn from that single example!

Today, sports are one of the best ways to understand American culture, from race relations to media fragmentation, to work.

Shifts in sports begin with shifts in media: baseball and the radio, football and television, and now, basketball and social media.

The popularity of football depends on television, an attitude of American exceptionalism, and a cultural indifference towards delicacy. As those attitudes perish, so will the NFL.

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Basketball reflects the future of work, culture, and society. Like social media, basketball is all about the individual. Like Naked Brands, the NBA thrives on strong personalities. The best players transcend their teams: Michael Jordan and the Bulls — LeBron and the Cavaliers.

Following the NBA is my favorite way to keep up with culture.

As I jokingly said to a friend at brunch last weekend: there’s no reason to read the news when you can follow the NBA instead.

Basketball reflects the future of work, culture, and society. As we enter a hyper-digital world, bet on the NBA.

What skills should young people focus on and what should they read to get an edge over their peers?

The internet pushes us towards the new. Our social media feeds have a recency bias.

I try to read older things. Time is the best measure of quality.

It sounds simple, but it’s an advantage that’s available to everybody.

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What are your thoughts on information consumption? How do you filter what and how much to read?

I love Nassim Taleb’s concept of Via Negativa. We know what is wrong with a lot more confidence than we know what is right.

Most people try to improve by addition. I say do the opposite. Remove things.

You see it in the self-help literature all the time. Do this. Do that.

I say “do less.”

Remove stuff.

“Filter” is the right word: distill, distill, and keep distilling.

It’s hard to know what’s good for us but it’s easy to understand what’s bad for us. All of us know when we’re reading junk or wasting time.

Especially in a world of information overload, removing the noise is simple and straightforward, compared with looking for something new. What you ignore is every bit as important as what you know.

I’m ruthless about removing noise from my email inbox, my Twitter feed, or my life. One lousy email newsletter and I unsubscribe.

It’s less about looking for good stuff and more about removing bad stuff.

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Who are your favorite bloggers? Feel free to break it down by topics.

I’m going to highlight three under-rated ones.

1. Dan Wang — Dan writes about technology, globalization, economics and philosophy.

Recommended Posts: “Definite optimism as human capital” | “College as an incubator of Girardian Terror.”

2. Drew Austin — Drew writes about cities, technology, and their dystopian future.

Recommended Posts: “The Networked Narrative” | “Civilization and the War on Entropy.”

3. On Art & Aesthetics — Explores creativity and beauty across different media

Recommended Posts: “I Hunt in Silence in the City” | “Gardens: An Essay on the Human Condition.”

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Who are 2–3 interesting, young people I should connect with, follow on Twitter and possibly interview?

1. Nat Eliason (@nateliason) — Founder of Growth Machine and host of the Made You Think Podcast. Nat is probably the best learner I know.

2. Daniel Sinclair (@_DanielSinclair) — Understands social media culture and Gen Z as well as anybody. Quiet guy; powerful mind.

3. Andy McCune (@9th) — At 22 years of age, he’s achieved more than the average person will accomplish in their lives. He’s one hell of an entrepreneur and an even better person.