Month: June 2015

Why Successful Entrepreneurs Must Be Masters at Risk Management

I know a very successful entrepreneur. He was highly praised locally as a success, and indeed the growth and reach increase of his business was impressive.

Upon careful observation, he was taking what much more risk than I would have ever considered to grow his business. This created substantial doubt for me – maybe I was too risk-adverse to succeed in my ventures? Are all entrepreneurs so highly risk-taking? Now, a few months later, the economy in that particular business is tough and he is close to losing everything. It’s tough on my side too, but thanks to a prudent management, I am confident my business will survive.

everest fatalities
The way to the top is littered with fatalities. And no-one remembers them.

I do believe that real entrepreneurs are necessarily masters at risk management. They know how to take risks, and they also know how to manage them, and in any case make sure that the worst case does not mean losing everything and creating excessive strain in their personal and family life.

Successful entrepreneurs on the long term are prudent.

Failure, yes. But failure withing a managed risk framework. The winners are those who survive. After the event, nobody talks any more about those who died on the way. You can be a temporary sensation, have your minute, hour or even month of fame. It’s much tougher to have a sustainable success – and often we don’t see these entrepreneurs until they have become so successful that we can’t ignore them – but they tend to stay beyond the limelight.

Nobody remembers the fatalities on the Everest. We remember only the winners. Those who know how to take the right level of risk and were also lucky in a way. If you are an entrepreneur, be prudent!

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What The Two Levels of Confidence Are

Following our previous post on ‘Why Showing Confidence is So Important‘, a key question for me is whether Confidence needs to be associated with a skill level of some sort, or can just be a general Confidence level.

ConfidenceI thus think there are two levels of confidence, and the second is much harder to achieve that the first:

  • First level: confidence achieved through a high mastery of a particular skill. The confidence level stems from a demonstrable capability that is quite higher than most can achieve
  • Second level: general confidence level, irrespective of a skill level. It can stem from a general confidence about life and that things will always turn for the better, or other sources such a religion. In any case, it comes from a much deeper belief.

I find that not so many people can reach the second level of confidence and it generally takes practice and exercise. Exercise your confidence to be able to use it more often and when you need it!

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How to Embrace Failure, but not too Tight!

It has become extremely fashionable to claim that failure is a decisive element of success. This has turned quite extreme, with stories ‘from rags to riches’, almost like if utmost failure (personal and professional) was a pre-requisite of success. It is almost as if each successful person had to find a way to show that at some point in his or her life, he or she was at the point of utter emotional breakdown with less than 10 cents on their bank account!

Jordan failure
Yes, we need to embrace failure. But like Michael Jordan, it should not be life-threatening. Don’t embrace failure too tight!

I think this is too extreme, and like any fashionable statement, it is time to bring some measure in it.

Failure is indeed a way to get immediate feedback and an indisputable way to progress. So, it is reasonable to seek a healthy part of failure as part of the learning and trying process. True – if you don’t encounter failure, it’s probably because you don’t try hard enough. At the same time, utter and total failure needs to be avoided as well. It damages people personally, their families and it can extremely difficult to recover.

Failure and tough times create resilience. Yet resilience can also be obtained otherwise, by the force of character and repeated exercise. Take for example Michael Jordan. Yes, he failed many times. In small ways. But his drive was his own, and that’s how he became successful. And he did fail small, never big. Even when he went to a year playing baseball, a ‘big’ failure, it was not putting everything in jeopardy. He was able to come back successfully to basket-ball. He gained the experience, and kept being successful.

Yes, seek to extend your comfort zone and fail to learn, but make sure that your risk remains reasonable. Don’t embrace failure too tight!

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What is the State of the Fourth Revolution?

On a yearly basis, Mary Meeker of Kleiner Perkins Caufield & Byers gives an important talk about the state of the internet (Internet trends). It is a very commented set of slides (the link to the slidepack and the presentation video below). Ijust want to comment two slides here.

Good news: the Fourth Revolution is pervading our society increasingly. The slide gives a measure of the impact depending on the area. Some progress needs to happen on the government and regulatory side for sure. Personally I believe that education is today quite more disrupted than what she shows here.

Fourth Revolution impact

On the bad news side, we are spending more and more time in front of a screen!! This is great news for advertisers but not necessarily for us. And yes, we’re communicating less in real life and more and more with your devices… and still watching TV as much as before!

Screen usage stats

Here are the links to the set of slides on slideshare

and to the video

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Why You Need to Give Yourself Permission for New Ideas

“New ideas won’t appear if you don’t have permission within yourself” – Salesforce CEO Marc Benioff, quoted in the book Focus by Daniel Goleman. He continues “When I was a VP at Oracle, I took off to Hawaii for a month just to relax, and when I did that it opened up my career to new ideas, perspectives, and directions.”

walkingYou need to give yourself permission and time to release your creativity. This is often related to giving yourself permission to disconnect and be creative. This might then take the shape of a walk, or of a couple of days off, undisturbed by the concerns of your usual occupation.

I can testify that my most creative moments have been related to a change of scenery and some time to think and develop new ideas.

So, if you want to be creative, create the space for it. You can’t find and explore new ideas if you stay in your daily grind and don’t spare time and space for this essential activity. It is not easy to give ourselves permission to do that because we all run very busy lives. But essential for change and your personal growth as well.

When will you give yourself permission for some time and space off?

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The Fourth Revolution Blog new design – we become mobile!

After 5 years it was time to improve the Fourth Revolution blog‘s design and functionalities.

We’ve just changed the Fourth Revolution blog’s presentation, because we need to adjust to the times! The new site’s design is sleek and ready for mobile, i.e. it adapts nicely to various screen sizes.

All the historical posts are still there and available, so you can still go and discover the Fourth Revolution’s 750++ posts since we started end 2010.

We have also retired the old Fourth Revolution website, but it remains accessible through the menu on the left if you want to access all the documentation and presentation we’ve uploaded there in 2010-2012.

Enjoy the blog visit!

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Why Showing Confidence is So Important

“Whoever has confidence always has the upper hand” – Manoj Vasudevan explained in a presentation about presentation skills I attended.

confidenceThink it through – at least on the short term, in an encounter, whoever has the most apparent confidence will in effect have the upper hand. I have personally encountered this with the highly powered, confident salesman-type person. We all know those people who are always highly confident whatever the subject.

At the same time I would not say that this effect is necessary sustainable, and reflection will allow to consider what was proposed in a more rational manner.

Still it remains that confidence is an exceptionally powerful ingredient in our daily lives and we need to be able to radiate confidence when needed.

How is your confidence muscle? What are the occasions where you think you should have shown more confidence and what can you do to look more confident next time?

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What the Different Maturity Stages of Big Data Analytics Are

It is increasingly trendy to speak about ‘Big Data’ and ‘data analytics’.

data_analyticsI like to use a framework to assess the maturity of what people are speaking about. This allows to understand what level of ambition we are discussing, because there is often some confusion.

  • Stage 0: reporting (of current processes – include more or less elaborate indicators)
  • Stage 1: comparison / benchmarking (with other similar processes, present or past)
  • Stage 2: correlations (establish data correlation between data series)
  • Stage 3: causation (more difficult than correlation, establish a causation link through root cause analysis etc.)
  • Stage 4: simulation (use the deep understanding gained in the previous stage to predict what will happen in slightly or very different conditions; and use the result to ascertain if the understanding is correct)

Stages 1 to 3 require ‘Big Data’ or at least the availability of a large number of series that can be observed for comparison, correlation and causation. In a lot of instances I have also observed people jump from stage 2 to 4, which we know is very dangerous as the bigger the data set, the more probable we can observe spurious correlations (see for example for fun the previous post ‘How We Will Need Specialists to Make Sense of the Authenticity of Big Data Correlations‘)

This simple framework can be very powerful to refer to when dealing with Big Data – do not hesitate to use it!

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Why You Should Respond Slower to Emails To Establish Your Status

“The longer someone ignores an email before finally responding, the more relative social power that person has. Map these response times across an entire organization and you get a remarkably accurate chart of the actual social standing” from a study quoted in the book Focus by Daniel Goleman.

Email timingIt continues: “The boss leaves emails unanswered for hours or days; those lower down respond within minutes. There’s an algorithm for this, a data mining method called “automated social hierarchy detection” developed at Columbia University. When applied to the archive of email traffic at Enron Corporation before it folded, the method correctly identified the roles of top-level managers and their subordinates just by how long it took them to answer a given person’s emails. Intelligence agencies have been applying the same metric to suspected terrorist gangs, piecing together the chain of influence to spot the central figures.”

So, unless you are trying to hide your hierarchical role in a gang, but want rather to establish some social status, do not respond to emails immediately. Let a few hours pass before responding… this also has the added benefit to make you less addicted to your phone or email and have less remorse if you take more time to respond!

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How Power Utilities need to Overcome the Power Revolution

In the wake of the energy revolution that unfolds quietly (see our post on solar power), power utilities face tough decisions. Their model is generally an industrial-age model where efficiency is gain by ever bigger power stations that benefit from scale effects to produce cheap power.

power_station
How long will be centralized power generation model survive?

The drawback is of course, the size of these stations and the related need for a very extensive distribution network, and also that to be profitable, investments need to be used for a large number of decades. Nuclear Power Plants for example, are now typically designed to last 60 years or more to amortize the investment cost.

Today, those utilities face a double threat:

  • the development of competitive distributed generation, which diminishes consumption from centralized stations and creates distribution network instability,
  • the increasing cost and lack of proper control on large power stations investments, for a variety of factors.
solar-panel-houses
A new urban landscape we need to get used to!

Centralized production capability will remain needed for a long time, in particular due to large industrial consumers and the need to have the capability to support power networks in case of extreme conditions. Yet it is will become increasingly difficult to justify the huge investments with the uncertainties of the market over the next decades. A major factor will be to be much more reliable in predicting the actual cost and schedule of construction projects. Some effort is needed in that respect in the power industry.

Utilities will soon face significant challenges to their traditional business model and they’d better take the issue upfront than become defensive. A major shift will happen, and as in all good things, a balanced approach that can be adaptable is always better than to bet too much on a single way of producing power. With some effort, thanks to our connectivity and processing capability, we will be able to manage the associated complexity of multiple sources of energy.

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How Solar Becomes an Energy Revolution

Right now, we are the witnesses of a very significant shift in energy production and consumption, at least when it comes to electrical power. New renewable forms of generation are becoming economically competitive, and power storage starts to be more realistic. And in addition, the trend is towards decentralized generation and storage.

solar-power price curveSolar energy, and in a more limited manner wind energy, are now becoming economically competitive even without subsidies. It is a real breakthrough – again, silicon and its exponential efficiency gains surprises us!

In Singapore for example, a country with a long standing non-subsidy energy policy, solar is now taken seriously as a substantial complementary power production source and the government is setting up an adequate framework to support financing and lease solutions for solar panels (so that consumers only pay for the power consumed but do not have to bear the upfront investment).

Elon Musk at Tesla is now unveiling home storage modules, and promote coupling with solutions for electrical based mobility. This paper in ParisTech Review summarizes well the vision that unfolds before our eyes: ‘How Elon Musk plans to transform two industries (and the 21st Century)‘. Of course we need to be fully aware that Tesla’s inroads currently relies a lot on heavy subsidies by the California state government, but it is quite possible that it may represent a future that is closer than we imagine.

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Why Who We Are Is Not What We Post

To all: be aware that what people present of themselves on social networks is not what they are in reality. “Facebook feeds the highest level of our most basic human need: self-actualization. It allow us to present ourselves in the way in which we would like others to see us” writes Mitch Joel in his blog.

facebookThis has significant consequences, in particular of course that (most) people will present themselves in a better way than what they might be or feel in reality. Also, we more often post stuff when exciting things happen to us, not when we are doing boring household chores!

As I mentioned in a previous posts, the Fourth Revolution and the virtual relationships we develop presents us with a number of challenges relating to our emotions. It is easy to get injured by a post or a comment.

The fact that people invent a sort of parallel life on their social network feed is one of the elements that can contribute to create strong emotions, in particular when it would seem that all our contacts live a far more exciting and varied life than we do.

In reality we are creating new virtual realities of ourselves online, which map somewhat but not completely with our reality. What we post is not who we are. And don’t believe that you know what people really are when you look at their feeds!

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