Some overlap with bits at Singularity University
INTRODUCTION: Birth of the Exponential Entrepreneur
Right now, there is another asteroid striking our world, already extinguishing the large and lumbering, already clearing a giant path for the quick and nimble. Our name for this asteroid is “exponential technology,” and even if this name is unfamiliar, its impact is not.
exponential technology refers to any technology accelerating on an exponential growth curve—that is, doubling in power on a regular basis
today, this kind of change is everywhere we look. Exponential progress is now showing up in dozens of arenas: networks, sensors, robotics, artificial intelligence, synthetic biology, genomics, digital medicine, nanotechnology—to name only a few
The Follow-on to Abundance
In Abundance, Steven and I explored how four potent emerging forces—exponential technologies, the DIY innovator, technophilanthropists, and the rising billion—give us the ability to solve many of the world’s grandest challenges over the next two to three decades
we have also come to feel that painting a picture of our vibrant future is insufficient. While we truly believe that creating a world of abundance is possible, it is by no means guaranteed. And it is for that reason we wrote Bold
The World’s Biggest Problems = Biggest Business Opportunities
the best way to become a billionaire is to solve a billion-person problem.
In Bold, Steven and I offer a highly practical playbook for doing just that
Bold unfolds in three parts
Part One focuses on the exponential technologies (Compounding)
Part Two of the book focuses on the psychology of Bold—the mental tool kit
Part Three closes the book with a look at the incredible power and essential best practices that allow anyone to leverage today’s hyperconnected crowd like never before
Who Should Read This Book
This book is for those who want to make the Giant Dent
A Collaboration of Two Minds
Part ONE BOLD TECHNOLOGY
Chapter One: Good-bye, Linear Thinking . . . Hello, Exponential
Birth of a Behemoth
1878. George Eastman
In 1892, the Eastman Kodak Company was born
The Memory Business
job with Kodak’s Apparatus Division
By 1975, working with a small team of talented technicians, Sasson used CCDs to create the world’s first digital still camera and digital recording device
In 1996, twenty years after this meeting took place, Kodak had 140,000 employees and a $28 billion market cap. They were effectively a category monopoly
Kodak was in the business of recording memories. And what made recording memories more convenient than a digital camera?
they buried the technology
Do the Math
Back in 1976, when Steven Sasson first demonstrated the digital camera at Kodak, he was immediately asked for a ready-for-prime-time estimate. How long, frightened executives wanted to know, until his new invention posed a serious threat to the company’s market dominance? Fifteen to twenty years, Sasson said.8
Sasson relied on Moore’s law for his calculation
The Six Ds
Underestimating the power of exponentials is easy to do
if the goal is to avoid Kodak’s errors (if you’re a company) or to exploit Kodak’s errors (if you’re an entrepreneur), then you need to have a better understanding of how this change unfolds—and that means understanding the hallmark characteristics of exponentials. To teach these, I have developed a framework called the Six Ds of Exponentials: digitalization, deception, disruption, demonetization, dematerialization, and democratization
*What follows digitalization is deception, a period during which exponential growth goes mostly unnoticed. *
as disruption always follows deception, the original technological threat often seems laughably insignificant
The Last Three Ds
Digitalization, deception, and disruption have radically reshaped our world, but the chain reaction we’re tracking is cumulative
*Thus the three Ds that follow—demonetization, dematerialization, and democratization—are far *
removal of money from the equation
In one sense, this transformation is the downstream version of what former Wired editor-in-chief Chris Anderson meant in his book Free
vanishing of the goods and services themselves
Once those smartphones hit the market, the digital camera itself dematerialized
*The roughly $900,000 worth of applications in a smart phone today Source: Abundance: The Future Is Better Than You Think, page 289 * Manufacturer’s Suggested Retail Price It shows all the 1980s luxury technologies that have dematerialized and now come standard with your average smartphone. *
Democratization is what happens when those hard costs drop so low they becomes available and affordable to just about everyone
For these exponential entrepreneurs, the future is not about disruptive stress; rather, it’s frothing with disruptive opportunity.
The New Kodak Moment
Salim Ismail defines an exponential organization as one whose impact (or output)—because of its use of networks or automation and/or its leveraging of the crowd—is disproportionally large compared to its number of employees
A Question of Scale
In his senior year of high school, Kaufman decided he wanted to build a “stealth iPod”—a device that would allow him to listen to his iPod shuffle, in class and in secret
rather than be satisfied with a prototype, he somehow convinced his parents to remortgage their home and lend him $185,000 to take his invention to market. With cash in hand, Kaufman was on the next flight to China
Kaufman persevered. He founded Mophie, an Apple accessories company, and brought that initial product to market. Then, using his hard-won skills, his company delivered several dozen other Apple accessories. After that came Kaufman’s next company, Quirky, the inspiration for which came to him early one morning in New York.
Kaufman created a company whose mission is to “make invention accessible
Kaufman swapped out the linear for the exponential, open-sourcing the entire process of product development. A Quirky user simply posts his or her product idea to the site, where other users vote on its feasibility and desirability. And what the crowd likes, the crowd builds, one crowdsourced, open-sourced step at a time
Go back twenty-five years and the time it took for any of these inventions to come to market was measured in years. With Quirky, it takes about four months
Candace Klein, a crowdsourcing expert and the very busy CEO of Bad Girl Ventures, a company that helps women start businesses
Every Saturday night, Klein gets together with a group of women friends for cocktails
We usually spend Saturday night talking about whatever it is we’d like to invent next. And we park these ideas on Quirky
Quirky is an alternative to the entire twentieth-century product development chain—an alternative to every single step in that once hugely capital-intensive process
By mid-2014, just six years into their existence, Airbnb had over 600,000 listings in 34,000 cities and 192 countries and had served over 11 million guests. Most recently the company was valued at $10 billion—making it worth more than Hyatt Hotels Corporation ($8.4 billion)—and all without building a single structure
Then there’s Uber
You’ll also need to understand the technologies and tools driving this change. These include exponential technologies like infinite computing, sensors and networks, 3-D printing, artificial intelligence, robotics, and synthetic biology and exponential organizational tools such as crowdfunding, crowdsourcing, incentive competitions, and the potency of a properly built community.
Chapter Two: Exponential Technology: The Democratization of the Power to Change the World
Reading Exponential Road Maps
Locke found one key trait they all shared: vision.
Great leaders all have the ability to see farther and the confidence to drag their organizations toward that vision
Thus the goal of this chapter and the next is to give you exactly what these great leaders had: the vision not to be swayed
This means giving you a much firmer sense of the future, and this requires a three-step process
The Hype Curve and the User Interface
when these technologies fail to live up to the initial hype—usually in that gap between deception and disruption on our list of the Six Ds—public sentiment for the technology falls into the trough of disillusionment. And this is where a great many of the technologies discussed in chapter 3 now sit. But when technologies are in the trough, we are again swayed by the hype (this time, the negative hype) and consistently fail to believe they’ll ever emerge, thus missing their massively transformative potential.
Recognizing when a technology is exiting the trough of disillusionment and beginning to rise up the slope of enlightenment is critical for entrepreneurs
for me, the most important telltale factor is the development of a simple and elegant user interface—a gateway of effortless interaction that plucks a technology from the hands of the geeks and deposits it with the entrepreneurs
The creation of a simple and elegant user interface gives entrepreneurs the ability to harness this new tool to solve problems, start businesses, and most importantly, experiment (Crossing the Chasm)
3-D Printing: The Origins and Power of Additive Manufacturing (Desktop Fab)
Industries Being Disrupted by 3-D Printing
Sources: Deloitte analysis; CSC, 3D printing and the future of manufacturing, 2012
One such opportunity lies with 3-D printing, a technology now emerging from a thirty-year period of deceptive growth and beginning to disrupt a portion of the $10 trillion global manufacturing industry
Charles Hull changed this game. In the early eighties
*print sheets of UV-hardened plastic atop one another (and attach them to one another), he could build new automotive components via accretion—a method of additive manufacturing *
Hull constructed his first 3-D printer in 1984, then founded the Valencia, California–based 3D Systems
By the early 2000s, despite their enormous first mover advantage, 3D Systems was on the verge of bankruptcy
The company was a train wreck,” says Avi Reichental
he was the person brought in to save the company.
I applied Moore’s law to all the different verticals that went into this technology and saw they were all about to explode
Reichental’s first order of business was to expand and integrate. “I wanted more printers, more materials to print with, and I wanted our printers to print with our materials so that you didn’t have to be a super-expert to figure out how to work the machines. Simplicity was really important to me.
Yet, as was pointed out in the last section, an exponential technology doesn’t really become disruptive until a powerful, user-friendly interface exists (think Mosaic). Thus 3D Systems has also expanded into software
Rogers describes digital manufacturing as the third industrial revolution. “The first revolution was the steam engine. Henry Ford gave us the second revolution, mass production, in which you can make something cheap as long as you make a million of them. The third revolution comes from the democratization of manufacturing
This third revolution is also impacting the aerospace industry. SpaceX recently announced it will 3-D print much of the rocket engine used in the Dragon 2 capsule
radically new kind of fuel nozzle
Medical devices are even further along
Invisalign—the clear plastic teeth-straightening alternative to metal braces
having a 3-D printer on the ISS would sure be useful
Made in Space, our first off-world 3-D printing company
printing entire space stations in space
Imagine being able to colonize a distant planet by bringing nothing but a 3-D printer and some mining equipment
Alice Taylor, a British designer who had none of these advantages yet has already made considerable progress toward disrupting the $3.5 billion doll segment of the $34 billion toy industry
Taylor is married to the science fiction writer Cory Doctorow
MakieLabs—a company that would allow anyone to custom-design and print a doll.
In our offices we have three small MakerBot printers for prototyping,” explains Taylor. “Once the design is right, we then print the final product using large 3D Systems printers on the cloud
Chapter Three: Five to Change the World
The Exponential Landscape
In this chapter, we’ll overview five more technologies also ripe for entrepreneurial exploitation: networks and sensors, infinite computing, artificial intelligence, robotics, and synthetic biology
Networks and Sensors
There are over seven billion smartphones and tablets in existence. Each of these devices is a mix of sensors—pressure-sensitive touch screens, microphones, accelerometers, magnetometers, gyros, cameras—that are increasing in number with every new generation of technology
Both in speed and in the number of connected devices, networks are undergoing a similar explosion
any discussion of networks and sensors leads directly to a discussion about how we’re going to extract value from all this data. The answer is where we’re going next. Welcome to the radical world of infinite computing
So what does all of this computing power buy you? An entirely new way to approach innovation, for starters
Artificial Intelligence (AI): Expertise on Demand
JARVIS first appeared in Iron Man as Tony Stark’s personal AI
unlike the never-actualized HAL, key elements of JARVIS are starting to come into existence in laboratories and companies around the world
in March 2013, I stood on stage at TED, alongside TED curator Chris Anderson, and announced our intent to join forces and design an AI XPRIZE.28 “Here’s the concept,” said Anderson. “An XPRIZE for TED to be awarded to the first artificial intelligence to appear on this stage and present a TED talk so compelling that it commands a standing ovation from you the audience.”
service industry,30 which in turn can be broken down into four fundamental skills: looking, reading, writing, and integrating knowledge.
One example of a new start-up backed by Watson is Modernizing Medicine
Soon,” says Ray Kurzweil,40 “we will give an AI permission to listen to every phone conversation you have
qubit (quantum bit) computer
Robotics: Our New Workforce
humanlike features—a mannequin face, sunglasses, a hat, traditional racing silks, and even the traditional perfumes used by human jockeys—help keep the animals calm
Consider Baxter,47 the brainchild of legendary roboticist Rodney A. Brooks
*Baxter is a big step forward,” says Dr. Dan Barry,48 head of robotics at SU. “It’s the first robot that bridges the gap between mindless, repetitive, robust, single-purpose industrial robots and intelligent, widely sensing, situationally aware, computationally complex, delicate research robots.” More important, Baxter is the kind of robot that entrepreneurs can now build businesses around. *
But what has been relatively slow progress—run out of university labs and funded by government grants—took a quantum leap forward in late 2013, when Amazon announced it was going into the drone business50 and Google announced the acquisition of eight robotics companies
If I were an exponential entrepreneur looking to create tremendous value, I’d look for those jobs that are least enjoyable for humans to do.
Startup infrastructure dedicated to robotics is likewise emerging
Genomics and Synthetic Biology
The difference with synthetic biology is that it’s not just individual letters being swapped out—it’s whole genomes
Synthetic biology is essentially genetic engineering gone digital
Biotechnology isn’t just accelerating at the speed of Moore’s law, it’s accelerating at five times the speed of Moore’s law
Already, biohacker spaces (where anyone can go and learn to play with synthetic biology) exist in most major cities and all the necessary equipment is available online (at cut-rate costs).
Perhaps the biggest news is that synthetic biology is on the verge of developing the ultimate enabling technology and leveler of the playing field—a set of user-friendly interfaces. One such tool is under development at Autodesk’s Pier 9 design center, where Carlos Olguin60 is working on Project Cyborg, a synthetic biology interface that allows high school students, entrepreneurs, and citizen scientists to program DNA
anyone can sell the results on Autodesk’s soon-to-be-established Project Cyborg marketplace
Making One Hundred Years Old the New Sixty
even more potential can be found at the intersection of multiple fields
HLI’s mission as “using the combined power of genomics, infinite computing, machine learning, and stem cell therapies to tackle one of the greatest medical, scientific, and societal challenges—aging and aging-related diseases.”
understanding this potential is critical if you’re going to succeed as an exponential entrepreneur
*before you consider taking your swing at the exponential piñata, the first and most important step is to convince yourself that you can take this step—which is why our next three chapters focus on the most critical tools in the kit of an exponential entrepreneur: the psychological techniques needed to go bold. *
Part Two: Bold Mindset
Chapter Four: Climbing Mount Bold
The Secret of “Skonk”
Al Capp was the creator of the legendary comic strip Li’l Abner, and the Skonk Works were among his most memorable inventions—though Capp had little to do with the term’s considerable staying power. Instead, we can thank the aerospace giant Lockheed for that. In 1943, Lockheed’s chief engineer, Clarence “Kelly” Johnson
these employees were housed in a rented circus tent (space was at a premium) intentionally located next to an exceptionally stinky plastics factory (to keep nosy people away), breathing itself was a little hard. That was why engineer Irv Culver borrowed Al Capp’s terminology and started calling the place the Skonk Works.
A few years later, at the request of the comic strip copyright holders, the spelling was changed to Skunk Works.
over the coming decades Lockheed’s Skunk Works would repeat this success
The Secrets of Skunk: Part One
Exponentials alone won’t get this job done
Every innovator interviewed for this book emphasized the importance of the mental game, arguing that without the right mindset, entrepreneurs have absolutely no chance of success
Thus the goal of part two of this book is to provide you with an attitude upgrade—a series of battle-hardened, time-tested psychological strategies for going big and bold.
first, the secrets of skunk
idea baked into the DNA of this methodology yet often omitted from the discussion—the purpose of the project itself.
Big goals significantly outperform small goals, medium-sized goals, and vague goals. It comes down to attention and persistence—which are two of the most important factors in determining performance. Big goals help focus attention, and they make us more persistent
Yet for these high, hard goals to really work their magic, Locke and Latham found that certain moderators—the word psychologists use to describe “if-then” conditions—need to be in place
One of the most important is commitment. “You have to believe in what you’re doing,”
The Secrets of Skunk: Part Two
*Wall the skunk works off from the rest of the corporate bureaucracy—that’s what you learn if you boil Johnson’s rules down to their essence. *
successful entrepreneurs need a buffer between themselves and the rest of society
increase rapid iteration—which is one of the best risk-mitigation strategies
as most experiments fail, real progress requires trying out tons of ideas, decreasing the lag time between trials, and increasing the knowledge gained from results. This is rapid iteration
an ever-growing pile of research shows that extrinsic rewards do not work like most suppose
Once we pay people enough so that meeting basic needs is no longer a constant cause for concern, extrinsic rewards lose their effectiveness, while intrinsic rewards—meaning internal, emotional satisfactions—become far more critical. Three in particular stand out: Autonomy, Mastery, and Purpose.
In his book Drive,13 author Daniel Pink explains
the secret to high performance isn’t our biological drive (our survival needs) or our reward-and-punishment drive, but our third drive—our deep-seated desire to direct our own lives, to extend and expand our abilities, and to fill our life with purpose.
To take on the bold, we need this third drive
Walling off the innovation team creates an environment where people are free to follow their own curiosity—it amplifies autonomy. Rapid iteration means accelerated learning cycles, which means putting people on the path to mastery. And aligning big goals with individual values creates true purpose.
How Google Goes Skunk
examine exactly how Google takes moonshots, giving you an inside look at their skunk methodology and paying attention to which of Kelly Johnson’s initial ideas they’ve kept, which they’ve changed, and—from a psychological perspective—why
Let’s start with what they’ve kept the same
Instead of mere 10 percent gains, they aim for 10x
You assume that going 10x bigger is going to be ten times harder,” he continues, “but often it’s literally easier to go bigger.
*vicious feedback process. “We try a lot of things,” says Teller, “but we don’t allow most of them to continue. At several different stages, we end most projects. Only a very small number are allowed to escalate to the next level. *
What’s going on is data or death. GoogleX demands that all their projects be measurable and testable. They won’t start a project if they don’t have ways to judge its progress.
while average entrepreneurs might not be able to afford to start, stop, or stall dozens of projects at once—the Google ecosystem—they can set up multiple experimental tracks, employing rapid iteration and tighter feedback loops to fail forward far more consistently
this kind of rigor brings a funding advantage. “People think that bold projects don’t get funding because of their audacity. That’s not the case. They don’t get funded because of a lack of measurability. Nobody wants to make a large up-front investment and wait ten years for any sign of life. But more often than not, if you can show progress along the way, smart investors will come on some pretty crazy rides
Google’s Eight Innovation Principles
1. Focus on the User
2. Share Everything
3. Look for Ideas Everywhere
4. Think Big but Start Small
5. Never Fail to Fail.
6. Spark with Imagination, Fuel with Data
*7. Be a Platform. *
8. Have a Mission That Matters
Flow (Flow State)
All of these mind hacks serve an additional function. Not only do they increase motivation and performance, they do double duty as triggers for the state of consciousness known as flow
How to find flow is a tricky question, yet it’s one my coauthor, Steven Kotler, has spent the past fifteen years trying to answer
One of the lessons to emerge from this work is that flow states have triggers—that is, preconditions that lead to more flow. There are seventeen flow triggers in total—three environmental, three psychological, ten social, and one creative.
By creating an environment packed with flow triggers, skunk works create a high-flow environment.
As a way of exploring how today’s entrepreneur can create such an environment, I want to introduce the book’s first how-to section
Flow’s Environmental Triggers
Rich environment, the next environmental trigger, is a combination platter of novelty, unpredictability, and complexity
Flow’s Psychological Triggers
tell us where and when to put our attention. They are different than the high, hard problems of big goals. Those big goals refer to overarching passions: feeding the hungry, opening the space frontier. Clear goals, meanwhile, concern all the baby steps
Immediate feedback, our next psychological trigger, is another shortcut into the now
The challenge/skills ratio, the last of our psychological flow triggers, is arguably the most important
Flow’s Social Triggers
Flow states allow an entrepreneur to stay open and alert to possibilities
So how to precipitate group flow?
serious concentration; shared, clear goals; good communication
equal participation and an element of risk
sense of control
*Always say “yes, and *
Flow’s Creative Trigger
pattern recognition (the brain’s ability to link new ideas together) and risk taking (the courage to bring those new ideas into the world)
Chapter Five: The Secrets of Going Big
Born Above the Line of Super-Credibility
I was only eight years old when Apollo 11 landed on the moon, and I decided then and there that going into space was what I wanted to do with my life
I realized NASA was never going to get me there
Thus I devoted the next thirty years to starting private ventures that I thought would open the space frontier
summer of 2009, when I got together with Eric for our annual “What’s Next?” retreat, our outlook on the future of space was gloomy at best. Despite these great wins, everything was still moving too slowly. To really open up the space frontier we needed more than a dozen people heading into orbit—we needed hundreds of thousands. We needed the advantages of scale
It had become clear to us that if we were ever going to open up space, then we needed to exploit the same economic engine that had opened every previous frontier: the search for resources
This was when Eric and I started having a serious discussion about asteroid mining
To pull off such a massive moonshot, we’re going to need help, a lot of help. And thus our first challenge—convincing anyone our dream was doable. This meant, for certain, we were going to have to give birth to this dream above the line of super-credibility
In each of our minds we have a line of credibility.
When you first hear a new idea, you place it above or below this line. If you place it below, you dismiss it immediately
But we also have a line of super-credibility. When a new idea is born above this line, you accept it immediately
Plotting the Line of Super Credibility
Unless Planetary Resources was introduced to the world far above that line, clearly it would be dismissed out of hand. We needed to assemble a team that people would intuitively trust to execute this vision
*because we were proposing to do something as bold as asteroid mining, credible wasn’t enough. For this reason, we kept the company secret for nearly three years, spending that period pushing ourselves further toward the line of super-credibility. *
The International Space University
you’re probably thinking this super-credibility advice isn’t much good for entrepreneurs without billionaires in their Rolodex
This story starts in 1980
we stitched together an organization of thirty college chapters
the three of us were invited to Vienna, Austria, to present at the United Nations
we met and befriended Arthur C. Clarke
“Uncle Arthur,” as we called him, shared stories about how close the space inventors, engineers, and visionaries of the 1940s and 1950s were to one another. It was the power of their collective friendship, knowledge, and vision that ultimately gave birth to the Apollo Program. The idea of such a tight network got us dreaming about creating an International Space University
because we were just graduate students, being credible wasn’t enough. We needed to be super-credible
Step One: Familiarity matters
Step Two: Slow down and build credibility
conference was already something we knew how to run
Step Four: Messaging matters
rather than present the plan ourselves, we asked our advisers to do the talking for us
Staging Toward Bold
breaking our vision into executable, bite-size chunks, what psychologists call subgoals
Subgoals bring dual benefits
money arrives in discrete waves
each increment proves the capability of the management team and the veracity of the vision
The second benefit to subgoals is psychological
we broke down our moonshot into five executable steps: 1. Hold
After the university had five years and about 550 alumni under its belt, we finally decided to try and parlay our assets into step 4 of our vision—a permanent terrestrial campus
We had no tangible assets
time to make stone soup
How to Make Stone Soup
I’ve come to think of making stone soup as the only way an entrepreneur can succeed
What makes stone soup work is passion
passion is a trickier subject than most assume. For starters, there are versions of passion that are extremely unhelpful to entrepreneurs, such as what John Hagel III, the cofounder of Deloitte’s Center for the Edge, calls the passion of the true believer. “In Silicon Valley we have many examples of the true believer,” says Hagel.17 “These are great entrepreneurs [who] are truly passionate about a very specific path and are notoriously not open to alternative views or approaches
Hagel and colleagues have made quite a study of passion,18 coming to define the version that best serves individuals and organizations as the passion of the explorer
“People who pursue their passions inevitably create beacons that attract others who share their vision,” says Hagel. “Few of these beacons are consciously created; they are by-products of pursuing one’s passion. Passionate people share their creations widely, leaving tracks for others to find them.”
Please tell us how much cash endowment, buildings, and operational money you will give us to bring our vision to your city
we received seven proposals ranging from $20 million to $50 million in funding, buildings, faculty, equipment, and even the promise of accreditation
Peter’s Laws—Mindset Matters
If anything can go wrong, fix it! (To hell with Murphy!)
before we get to my ideas, we first need to address something far more important: your ideas
#17: THE BEST WAY TO PREDICT THE FUTURE IS TO CREATE IT YOURSELF!
#10: WHEN FACED WITHOUT A CHALLENGE—MAKE ONE!
#11: NO SIMPLY MEANS BEGIN ONE LEVEL HIGHER
#1: IF ANYTHING CAN GO WRONG, FIX IT! (TO HELL WITH MURPHY!)
#2: WHEN GIVEN A CHOICE—TAKE BOTH!
All through graduate school I was told to either go to school or start a company. It was binary or bust. But not for me. In my case, the answer was both and then some. I started three companies while in graduate school. I started eight more before I was forty
This multiple-choice approach—if properly managed—can create tremendous momentum. Ideas cross-pollinate. Networks expand
#18: THE RATIO OF SOMETHING TO NOTHING IS INFINITE
#21: AN EXPERT IS SOMEONE WHO CAN TELL YOU EXACTLY HOW SOMETHING CAN’T BE DONE
Peter’s Laws™ The Creed of the Persistent and Passionate Mind 1. If anything can go wrong, fix it! (To hell with Murphy!) 2. When given a choice—take both! 3. Multiple projects lead to multiple successes. 4. Start at the top, then work your way up. 5. Do it by the book . . . but be the author! 6. When forced to compromise, ask for more. 7. If you can’t win, change the rules. 8. If you can’t change the rules, then ignore them. 9. Perfection is not optional. 10. When faced without a challenge—make one. 11. No simply means begin one level higher. 12. Don’t walk when you can run. 13. When in doubt: THINK! 14. Patience is a virtue, but persistence to the point of success is a blessing. 15. The squeaky wheel gets replaced. 16. The faster you move, the slower time passes, the longer you live. 17. The best way to predict the future is to create it yourself! 18. The ratio of something to nothing is infinite. 19. You get what you incentivize. 20. If you think it is impossible, then it is for you. 21. An expert is someone who can tell you exactly how something can’t be done. 22. The day before something is a breakthrough, it’s a crazy idea. 23. If it was easy, it would have been done already. 24. Without a target you’ll miss it every time. 25. Fail early, fail often, fail forward! 26. If you can’t measure it, you can’t improve it. 27. The world’s most precious resource is the persistent and passionate human mind. 28. Bureaucracy is an obstacle to be conquered with persistence, confidence, and a bulldozer when necessary.
Chapter Six: Billionaire Wisdom: Thinking at Scale
Four Who Changed the World
This chapter, which marks the end of that psychological exploration, focuses on the mind hacks of four remarkable men
Elon Musk, Richard Branson, Jeff Bezos, and Larry Page.
pushed through the limitations of linear thinking, and understanding their strategies for thinking at scale can help us do the same
all four have leaned heavily on three of the psychological tools covered in earlier chapters
each in different and insightful ways—and, equally crucial, each relies on five additional mental strategies
1. Risk taking and risk mitigation 2. Rapid iteration and ceaseless experimentation 3. Passion and purpose 4. Long-term thinking 5. Customer-centric thinking 6. Probabilistic thinking 7. Rationally optimistic thinking 8. Reliance on first principles, aka fundamental truths
Elon Musk and Life on Mars
So what’s his secret? Musk has a few, but none are more important to him than passion and purpose
*But having passion and purpose is merely the first step. *
really important to solicit negative feedback from friends. In particular, feedback that helps you recognize as fast as possible what you’re doing wrong and adjust course
first principle thinking works so well because it gives us a proven strategy for editing out complexity, while also allowing entrepreneurs to sidestep the tide of popular opinion
He consistently strives to broaden his view by thinking in probabilities. “Outcomes are usually not deterministic,” he says, “they’re probabilistic
The future is not certain,” continues Musk. “It’s really a set of branching probability streams.” How Musk chooses which streams to explore depends on the relationship between those probabilities and the importance of his objective
Sir Richard Branson
to save his airline and avoid bankruptcy, he was forced to sell off his majority stake in Virgin Music, netting him the $800 million he needed to keep himself and his airline afloat.15
Richard would build on his music business and his airline business, going on to start, invest in, and create over five hundred different companies
We’re a ‘way-of-life’ brand
Branson is a fun junkie
Fun matters more because Branson employs it as strategy for thinking at scale—both as a fuel (i.e., a way of harnessing his passion) and as a first principle, assuming that if something is fun for him—like an airline that makes you say “Wow!”—then it’ll also be fun for everyone else
Branson always conducts the experiment
If Branson thinks a particular service might be beneficial to his customers (i.e., fun), he tries it out.
Branson, like Larry Page and Jeff Bezos, also runs his empire like a competitive ecosystem—letting some companies live, letting others die, and always, ceaselessly, experimenting. He is quick to rapidly iterate his ideas, and quicker to shut down a failure. In total, while Branson is known to have started some five hundred companies, he has also shut down the two hundred of them that didn’t work
Branson and Musk employ different risk management strategies. In fact, all four men in this chapter have different strategies
The wake-up call that led to Amazon.com was finding that web usage in the spring of 1994 was growing at 2300 percent a year
Amazon has been playing the long game
second secret to his success: radical customer-centrism
“It’s so hard to catch something that everybody already knows is hot,” says Bezos. “Instead, position yourself and wait for the wave to come to you. So then you ask, Position myself where? Position yourself with something that captures your curiosity, something that you’re missionary about.
today a Masai warrior in the heart of Kenya who has a smartphone and access to Google has—at his fingertips—access to the same level of information that the president of the United States did eighteen years ago. And it’s this kind of world-changing impact that especially interests Page
“I have a very simple metric I use: Are you working on something that can change the world? Yes or no? The answer for 99.99999 percent of people is no. I think we need to be training people on how to change the world.”
anything you imagine is probably doable. You just have to imagine it and work on it
What helps Page imagine the impossible is a fervent belief in rational optimism.38 The term, borrowed from author Matt Ridley
So where does the next 10x come from? For Page, like Musk and Branson and Bezos, that answer always sits at the intersection of long-term thinking and customer-centric thinking
The toothbrush test is simple: Do you use it as often as you use your toothbrush? For most people, I guess that’s twice a day
“Artificial intelligence would be the ultimate version of Google,” he explains. “The ultimate search engine
even if you fail in doing something ambitious, you usually succeed in doing something important
If you work for Larry and are not thinking 10x, don’t expect to keep your job for very long
Part Three: The Bold Crowd
Chapter Seven: Crowdsourcing: Marketplace of the Rising Billion
They met during an online T-shirt design competition—something that was then occasionally starting to happen—and decided they wanted such contests to happen more frequently. Instead of a competition just once a year, they decided to create a website that hosted them once a week. Anyone with a good T-shirt design could enter. Everyone in the community could vote. The winner got a hundred dollars, and the winning T-shirt was put up for sale on the site. They named their new venture Threadless.com, and mostly it seemed harmless enough.2 Turns out, people liked to vote on T-shirts. They really liked to vote on T-shirts. Within a few years, Threadless was turning an annual profit north of $20 million
Second Life, a massive virtual world that was essentially built for free, with Rosedale merely outsourcing software development to the gaming crowd. And the crowd, as Jeff Howe wrote in Wired, “[was] only too eager to do the work.”
An entire economy emerged inside the game
It was also Jeff Howe, alongside Wired editor Mark Robinson, who noticed what was happening with the likes of Threadless and Second Life and coined the term crowdsourcing
As crowdsourcing gained steam, crowdfunding (covered in detail in the next chapter) was developing. While the idea dates back to the 1980s, it became a mainstream phenomenon in 2005, when Kiva.org became the first microlending website
Indiegogo and Kickstarter
As movements, both crowdfunding and crowdsourcing diversified quickly, with all sorts of commercial applications beginning to emerge
So why does this whole crowdsourcing arena matter so much for exponential entrepreneurs?
Consider what Larry Page’s dream of artificial intelligence might look like when it finally arrives
while that extraordinary capability may still be a decade or so away, in the interim, we have the crowd.
Part three of Bold examines what we’ve chosen to call exponential crowd tools
Before we launch into crowdsourcing in greater detail, it’s helpful to pull back a bit and see how these ideas work within the greater context of part three of this book
Case Study 1: Freelancer—Quantum Mechanic for Hire by the Hour11
Barrie began buying up existing crowdsourcing companies. He started with Get a Freelancer, the first site he’d used, then moved on to Scriptlance and vWorker and soon added seven more. All nine were merged into Freelancer.com
Under the hood, Freelancer.com is actually in the connection business, existing to bring together two types of entrepreneurs. “On one side,” explains Barrie, “we’ve got under-resourced small-business entrepreneurs in the developed world. They don’t have a lot of money, don’t have a lot of time, but they have all these ideas. On the other side, in the developing world, we empower a whole new class of entrepreneur—the service providers who can help turn those ideas into reality.”
We’ve got PhDs on the site. I’ve seen both quantum physics and aerospace jobs handled perfectly
now you can be one guy sitting in a room with a few thousand dollars and off the back of a credit card you can build a multimillion-dollar company
Case Study 2: Tongal—Genius TV Commercials at One One-Hundredth the Price13
Tongal, a crowdsourcing platform that can help you create TV-quality video commercials for digital or television advertising ten times cheaper, ten times faster, and with ten times the number of content options than by standard processes
Today the Tongal freelance pool includes more than 40,000 creatives
“A large brand will typically spend between 10 and 20 percent of their media buy on creative,” DeJulio explains. “So if they have a $500 million media budget, there’s somewhere between $50 to $100 million going toward creating content. For that money they’ll get seven to ten pieces of content, but not right away. If you’re going to spend $1 million on one piece of content, it’s going to take a long time—six months, nine months, a year—to fully develop. With this budget and timeline, brands have no margin to take chances creatively.”
first step is to put up a purse—anywhere from $50,000 to $200,000. Then, Tongal breaks the project into three phases: ideation, production, and distribution, allowing creatives with different specialties (writing, directing, animating, acting, social media promotion, and so on) to focus on what they do best
Compared to the seven to ten pieces of content the traditional process produces, Tongal competitions generate an average of 422 concepts in the idea phase, followed by an average of 20 to 100 finished video pieces in the video production phase
reCAPTCHA, a website that serves a dual purpose, both helping to distinguish bots from humans while simultaneously helping to digitize books
Ahn’s dual-use crowdsourcing platform is digitizing over 100 million words a day—the equivalent of 2.5 million books a year
I started wondering about how we could translate the web into every major language
why can’t we get the people who are learning a foreign language to translate this stuff for us?
This was the birth of Duolingo, both a language education website and a translation game that really works
How to Crowdsource
1. Crowdsourcing Tasks
tasks come in two basic flavors: micro and macro.
one of the most important questions to answer when approaching crowdsourcing is whether the work can be broken down into smaller, simpler units. If so, what is the simplest microtask that can be defined and distributed?
While MTURK isn’t all that useful for more complicated jobs, it is where to go to get simple, quick tasks done fast
Another microtask site that I’ve previously relied upon (and with great result) is Fiverr
In contrast to the above microtasks, macrotasks are jobs that (a) can’t be broken down, (b) can be done independently, (c) require some type of specific skillset or thought process, (d) are additive and dependent on already completed work for the task, and (e) take a discrete, fixed amount of time to complete. There are a number of different companies that allow you to crowdsource macrotasks, with the aforementioned Freelancer.com being the largest
For a detailed list of the latest sites with examples of how to use them, please see www.AbundanceHub.com
2. Crowdsourced Creative/Operational Assets
Creative assets include a wide variety of design-based assets such as logos, videos, website designs, CAD models, marketing plans, and advertising plans
Operational assets, meanwhile, are those things required for business to run effectively. For example, if you are running a software business, these assets include the algorithms powering your software, your database architecture and server implementation, technical designs, models, and frameworks that organize deal flow and customer acquisition strategies, and so on
we are generating more data than ever before. Unfortunately, not everyone knows how to tease out valuable insights from this deluge. Enter companies like Kaggle
3. Crowdsourced Testing and Discovery Insights
Testing-based insights often come from examining existing assumptions and current best practices
Creatives are also getting in on the insight game. Take ReverbNation (www.reverbnation.com), a music distribution, publishing, and crowdsourced testing platform. Say you’re an aspiring musician. You’ve produced a few songs, but before spending money on paid advertising or management, you want to see whether anyone actually likes your music. Now you can have songs rated and reviewed long before you actually go to market.
The other side of this insight equation is the crowdsourcing of discovery-based insights
Discovery-based insights can be as simple as asking the crowd for answers and paying attention as the best solutions, designs, and inventions bubble their way to the top
AbundanceHub.com: This is the place I’ll be posting my own experiences
Crowdsourcing.org: The industry-leading resource for everything crowdsourcing
4. Crowdsourcing Best Practices
twelve best practices
i. DO YOUR RESEARCH
ii. JUST GET BUSY
once you start talking to them and looking through their samples of work, they’ll give you ideas
iii. TURN TO THE MESSAGE BOARDS
iv. ESTABLISH CONTEXT AND BE SPECIFIC
v. PREPARE YOUR DATA SET
vi. QUALIFY YOUR WORKERS
vii. DEFINE CLEAR, SIMPLE AND SPECIFIC ROLES
viii. COMMUNICATE CLEARLY, IN DETAIL, AND OFTEN
ix. DON’T MICROMANAGE; HAVE AN OPEN MIND FOR NEW WAYS OF THINKING
x. PAY TO PLAY—THAT IS, GO FOR QUALITY FIRST, THEN PRICE
xi. PREPARE FOR THE FLOOD
xii. BE OPEN TO NEW WORKING METHODOLOGIES
Chapter Eight: Crowdfunding: No Bucks, No Buck Rogers
The Money Question
Emergence of Crowdfunding
There are more than 700 crowdfunding sites online today
The Types of Crowdfunding
There are four main types of crowdfunding, each based on what the investor receives in return for helping to fund a campaign: donation, debt, equity, and reward.
the focus in this chapter is going to primarily be on the fourth category: reward-based crowdfunding
examine three different reward-based funding efforts
Case Study 1: The Pebble Watch
finishing this smartest watch ever required an additional $200,000
Pebble crew brought in the tech blog Engadget as their exclusive launch media partner
“Two hours after the Engadget article went live, we hit $100,000,” recalls Migicovsky. “We hit $200,000 about two hours after that. In the first twenty-eight hours we raised a million dollars. The first day was spent mainly in awe at what we had started. By the end of the campaign, on May 18, 2012, we had passed $10 million
Pebble sold more than 400,000 watches in their first twelve months, beating iPod’s first year (they shipped 394,000).
Case Study 2: Let’s Build a Goddamn Tesla Museum
Wardenclyffe, Tesla’s final laboratory (located in Shoreham, New York, and where the inventor attempted to create a power station that would provide the world with free electricity), was up for sale
Partnering with the nonprofit Tesla Science Center (which had been trying to buy this land for eighteen years), Inman turned to the crowdfunding platform Indiegogo
Case Study 3: The ARKYD Space Telescope—Access for Everyone
We wanted to stimulate people’s interest now, hopefully by providing them with a way to participate firsthand. This was when we hit upon the idea of crowdfunding the first ever crowd-controlled space telescope, the ARKYD
army of super activists we dubbed Planetary Vanguards to help us implement and promote the campaign
one of our team members suggested offering a “space selfie”—a chance for anyone to send a photo of themselves up to our spacecraft, where that image would be displayed on a screen, photographed with the Earth in the background
*Our goal was to raise $1 million—enough money to launch the telescope into orbit (the actual cost of the telescope was being covered by Planetary Resources). *
The Money Solution: A How-To Guide to Crowdfunding
Who Should Do a Crowdfunding Campaign?
Seven Reasons to Consider Crowdfunding
a great deal of how you design your campaign depends on which of these benefits you desire most
Execution—Twelve Key Steps
1. CHOOSING YOUR CROWDFUNDING IDEA (PRODUCT, PROJECT, OR SERVICE)
2. HOW MUCH? SETTING YOUR FUND-RAISING TARGET
crowdfunding is not where you make a profit on your project. It’s where you offset some of your expenses
3. HOW LONG? SETTING YOUR CAMPAIGN LENGTH AND CREATING A SCHEDULE
4. SETTING YOUR REWARDS/INCENTIVES AND STRETCH GOALS
It is important to have a low-priced, all-digital, no-brainer reward at the low end because it brings people into your community at no cost to you. This has two further benefits. First, 62 percent of successful campaigns have repeat funders
ask them what rewards you should give away
you can add new reward levels to your campaign along the way
5. BUILDING THE PERFECT TEAM
these campaigns are very labor intensive. They require time and effort to plan and execute
seven key team roles—five are mandatory, two are optional—that must be filled in order to give yourself the highest chance of success. That said, for a campaign in the range of $5,000 to $25,000, it is possible for an individual or a couple of people to pull this off, but if you’re looking for six or seven figures, you’ll need a much larger team
The Celebrity (the Face).
Campaign Manager and Strategist
Graphic Design Lead
Public Relations Manager (optional)
6. SHARPEN YOUR AX: PLANNING, MATERIALS, AND RESOURCES
7. TELLING A MEANINGFUL STORY (AND USING THE RIGHT WORDS)
Traditional fund-raising is something of a niche game. The goal is to please a specific kind of person—a venture capitalist or bank loan officer. Crowdfunding is the opposite. Its focus is exceptionally wide instead of seriously narrow
Tips for Telling a Meaningful Story
Make it cohesive
Fill a need or desire
Focus on the why, not the what
Connect with your vertical.
Use the right words
8. CREATING A VIRAL VIDEO: THREE USE CASES, SHAREABILITY, AND HUMANIZATION
This may sound optional, but if you’re serious about funding your campaign, it isn’t.
9. BUILDING YOUR AUDIENCE: THE THREE AS
three parts: affiliates, advocates, and activists
The ideal affiliates share your vision and your customer base
When we started planning for the ARKYD launch at Planetary Resources, we thought science museums would be our best partners
We were wrong
Ultimately, we ended up partnering with people like Bill Nye
In typical product launches, affiliates often take a percentage of sales in return for their help in selling and spreading the product. In crowdfunding, this is too complex and expensive to do effectively
Design programs to spread the word about your project that are self-promotional to the partner
build your mailing list and social following in the months before launch
supporters who want to do substantial and significant work for the campaign
We asked them to fill out a questionnaire estimating how much time they could volunteer each week
In the months prior to launch, we gave our vanguards assignments, held private meetings, and used them as test subjects for the different strategies we were considering
Of the 10,000 or so unique clicks we received on the first day of the campaign, almost 50 percent were attributable to the vanguards
10. SUPER-CREDIBLE LAUNCH, EARLY DONOR ENGAGEMENT, AND MEDIA OUTREACH
11. WEEK-BY-WEEK EXECUTION PLAN—ENGAGE, ENGAGE, ENGAGE
projects with regular updates—blog posts, videos, and so forth—raise 218 percent more money than those without
12. MAKE DATA-DRIVEN DECISIONS AND FINAL TIPS
Hold the Presses—Some Final Advice
62,642 people to pledge $13,285,226 to support his Coolest Cooler campaign
Brendon and Ryan had uncovered four ideas not discussed in any of our previous examples, but with enough importance that a last-minute insertion was justified. So here’s a quick look at what they learned along the way.
1. Fail Forward.
Ryan’s first attempt at crowdfunding the Coolest Cooler actually failed.
2. Start with a Crowd
*Ryan’s supporters from his first campaign filled that bill. *
3. Mockup Matters
it’s not all about looks—it’s actually about trust
4. Targeted Advertising
From our first failure, we had some data about our backers
*targeted Facebook ads *
Chapter Nine: Building Communities
*A community is pulled from the crowd. It’s everyone with whom you have a working relationship. *
we’re going to focus on two: DIY communities and exponential communities
A DIY community is a group of people united around a massively transformative purpose (MTP)
An exponential community, meanwhile, is a group of people who are immensely passionate about a particular exponential technology
Communities are now empowered to tackle jobs far larger in scope and size than anything previously possible
today the Internet permits top-down and bottom-up and side-to-side communication. In communities, these new possibilities for communication don’t just allow a leader to lead, they allow other leaders to emerge. They permit collaborative structures
after Facebook COO Sheryl Sandberg wrote Lean In, her bestselling book on empowering women to pursue their ambitions, she decided to capture the energy it was generating by building an online women’s community. As part of their growth strategy, one of their ideas was to create Lean In circles
The driving force behind all of these novel collaborative structures, self-organizing or otherwise, is an entirely new kind of value proposition, what technology expert and author Joshua Klein calls reputation economics
all sorts of entirely beneficial but—the key point—not always financial exchanges.
This means that communities don’t grind to a halt when money is not readily available.
Mutually beneficial nonfinancial trades can actually be better—that is to say, add more value—for the participants involved than a plain old currency exchange. There’s less friction, so people are often more motivated to make such trades
You can go big because you don’t need to know how to pull something off ahead of time. The community shapes the path and accelerates the process
Case Study 1: Galaxy Zoo—A DIY Community
unlike pre-Sloan astronomers, Schawinski didn’t have just a few thousand photographs to work with—he had nearly a million. Unfortunately, at the time, our best computer algorithms couldn’t spot blue ellipticals
Within twenty-four hours, they were classifying nearly 70,000 galaxies an hour. “What we realized very quickly was there was this huge demand among people to get involved in this. At first we were kind of puzzled by why people would want to go to a website and classify galaxies in such huge numbers. Then we realized we’d hit upon an unmet need—people want to do this. They wanted to contribute
Galaxy Zoo became a smorgasbord of citizen-science projects, now hosted at Zooniverse.
Schawinski and his cohorts had accidentally stumbled upon is what I call the Law of Niches, the idea, quite simply, that you are not alone. This is one of the most telling features of the web—the somewhat humbling fact that no matter what oddball notion you’re deeply passionate about, well, there are plenty of folks who share the same passion
Case Study 2: Local Motors—A DIY Community
At age twenty-six, he gave up his position at Stanford and became a Marine, signing up in 1999 and serving six and half years, including a tour in the Pacific and another in Iraq. In 2004, on his second tour, Rogers brought along a copy of Winning the Oil Endgame, visionary environmentalist Amory Lovins’s book about how society can wean itself from fossil fuel dependence. The book was a turning point. He read it right around the time two of his closest friends were killed in combat. The combination made him realize that what he really wanted to do with his life was ensure that no one else ever died for oil
There is this huge pent-up need in people to create cars, this very frustrated passion
While today’s Local Motors community is over 130,000 active members strong—with another 1,000,000 or so lurkers (those who watch but have not yet participated)—the collective that built that first Rally Fighter was a meager 500 people by comparison
Case Study 3: TopCoder—An Exponential Community
By atomizing big projects into bits, then organizing competitions around each bit, specialists within the TopCoder community deliver solutions one puzzle piece at a time
become involved in efforts significantly farther afield
trying to sift through a huge pile of genetic information about the immune system
rapidly and efficiently answered by a community of more than 400,000 computer programmers
“Competition just happened to be the thing that first engaged our community,” says Hughes. “Many other aspects of TopCoder are about collaboration
Who Should Build a DIY Community?
if you can leverage an existing community to fulfill your dreams, go that route. But if you’re passionate about something and no one else is sating that desire, then you have first-mover advantage
There’s a corollary here: If you don’t have first-mover advantage, then ask yourself what new and exciting twist you are bringing to the table. Think about CrossFit.
It’s also important to remember that people join communities because it reinforces their sense of identity (see below), but they stay for the conversation
When Chris Anderson initially created DIY Drones, he spent an average of three to four hours each day curating his community
Why Not to Build a DIY Community
Stages of Community Building
Identity—What Is Your MTP?
People join DIY communities because it reinforces their sense of identity. So start by finding your people. Who is your tribe? What is your MTP?
This is also why it’s important to tell your story
Designing Your Community Portal
Early Days of Building Your Community
Better to extract 1 hour a day from 100 committed members than have 50,000 mostly inactive lurkers. Stay small and extract maximum value from the few, not a little from the many
Creating Community Content
Engagement and Engagement Strategies
challenges are necessary because they help you keep “entitlement” to a minimum
Managing Your Community
The best communities are run by benevolent tyrants
1. Transparency and Authenticity
Moreover, there’s a good chance your community is also looking for ways to make money from their passion, so drive engagement by making monetization a topic for discussion.
2. Sell What the Community Builds
3. Cater to the Core
4. All the Typical Stuff
two of the exponential crowd tools discussed in this section are themselves mechanisms to turn a crowd into a community. The first is crowdfunding
The second mechanism is where we’re going next. It’s the topic of our final chapter, the incredible innovation accelerator and community-building strategy that helped launch my career: incentive prizes.
Chapter Ten: Incentive Competitions: Getting the Best and Brightest to Help Solve Your Challenges
Getting the Best and Brightest to Help Solve Your Challenges
An incentive competition is straightforward. Set a clear, measurable, and objective goal and offer a large prize to the first person to achieve it.
this mechanism pulls together most of the knowledge from the previous nine chapters: the use of exponential technologies, thinking at scale, crowdsourcing genius, providing opportunities for crowdfunding, and stimulating the creation of DIY communities
Before I read Spirit, I’d always believed that Lindbergh woke up one day and decided to head east, crossing the Atlantic on a whim. I had no idea that he made his famous flight to win the Orteig Prize—a $25,000 prize for the first person to fly solo from Paris to New York (or vice versa)
By the time I finished reading The Spirit of St. Louis, the concept of an incentive prize for the “demonstration of a suborbital, private, fully reusable spaceship” had formed in my mind.
The Power of Incentive Competitions
In 1714, the £20,000 Longitude Prize was offered to the first person to accurately measure longitude at sea.
In 1795, for example, Napoléon I offered a 12,000-franc prize for a method of food preservation to help feed his army on its long march into Russia. The winner, Nicolas Appert, a French candy maker, established the basic method of canning, still in use today.2
The success of these competitions stems from a few underlying principles
large incentive prizes raise the visibility of a particular challenge
also help foster the belief that a given challenge is in fact solvable
in areas where market failures have hindered investment or entrenched incumbents have prevented progress, prizes break bottlenecks
cast a wide net. Everyone from novices to professionals, from sole proprietors to massive corporations, gets involved.
Because of the competitive framework, everyone’s appetite for risk increases, which drives further innovation
competitions inspire hundreds of different technical approaches, which means that they don’t just give birth to a single-point solution, but rather to an entire industry
Why Prizes Work
Margaret Mead once said, “Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.”
Large or even medium-sized groups—corporations, movements, whatever—aren’t built to be nimble, nor are they willing to take large risks
There is another powerful psychological principal at work here: the power of constraints
most teams go over budget, spending considerably more than the prize money trying to solve the problem (because by design, there’s a back-end business model in place to help them recoup their investment).
The time limit of a prize competition serves as another liberating constraint
Having a clear, bold target for the competition is the final important restriction. This massively transformative purpose (MTP) galvanizes passion
Case Study 1: Wendy Schmidt Oil Cleanup XCHALLENGE
British Petroleum’s Deepwater Horizon oil rig
in May 2010, oil was still gushing into the gulf. The news covered the spill day after day with no end in sight. That was when newly elected XPRIZE trustee, ocean explorer, and Academy Award–winning film producer and director James Cameron emailed me to suggest a rapid-response “flash prize” to address the disaster
Moments later, I heard from philanthropist Wendy Schmidt, president of the Schmidt Family Foundation and wife of Eric Schmidt.
To measure success, we decided to lean on two established industry metrics: oil recovery rate (ORR), the amount of oil that can be recovered per minute, and oil recovery efficiency (ORE), the amount of oil recovered per volume of water
twenty-seven submitted designs by the April 2011 deadline
Seven teams doubled the industry’s previous best ORE
the most memorable outcome came from one of the finalists who didn’t win. Vor-Tek was one of the teams that doubled the oil spill cleanup rate, but didn’t place in the top three. They were a team of complete novices from far outside the oil cleanup business. They had met at a Las Vegas tattoo parlor
Case Study 2: The Netflix Prize
The best incentive prizes are those that solve important puzzles that people want solved and people want to solve—and there’s a difference
there is a second kind of momentum you can tap into—our innate desire to compete
what else do coders enjoy doing? They watch movies—a lot of movies
Netflix’s original recommendation engine, Cinematch, was created back in 2000 and quickly proved to be a wild success. Within a few years, nearly two-thirds of their rental business was being driven by their recommendation engine. Thus the obvious corollary: the better their recommendation engine, the better their business
announcing the Netflix Prize in October 2006
By the time the contest was won, in 2009, that figure had doubled to 40,000 teams.
Secrecy hasn’t been a big part of the Netflix competition. The prize hunters, even the leaders, are startlingly open about the methods they’re using
simonfunk’ posted a complete description of his algorithm—which at the time was tied for third place—giving everyone else the opportunity to piggyback on his progress. ‘We had no idea the extent to which people would collaborate
Over the course of the eight XPRIZEs launched to date, there has been an extraordinary amount of cooperation. We’ve seen teams providing unsolicited advice, teams merging, teams acquiring and sharing technology and experts
Case Study 3: HeroX
asked myself how I would disrupt my own company. Or more specifically, how might someone disrupt XPRIZE? The answer, which should now be evident, is the creation of an online platform that allows anyone to launch a challenge in any area he or she cares about, where the crowd can help design the prize, fund the prize, and ultimately compete to win the purse
Graham Weston, cofounder of Rackspace, stepped up to be our first customer. Weston wanted to help Mexican entrepreneurs open up stores on the US side of the border, specifically in his hometown of San Antonio. To do this, he launched a 24-month, $500,000 competition on the HeroX platform dubbed the San Antonio Mx Challenge
On the heels of this successful launch, HeroX is now developing dozens of challenges in dozens of cities.
The Benefits of Using an Incentive Competition
1. Attracting new capital to innovators solving the problem
billions in resources normally allocated for both philanthropy and sponsorship.
sponsorship. 2. You pay only the winner
*3. Crowdsourcing genius. *
4. Increasing public awareness and raising the visibility of a problem
5. Overcoming existing constraints
6. Changing the paradigm
7. Launching an industry, with lasting benefit and impact
should be designed so that the awarding of the purse is not the end of the story, but rather the beginning of a new industry
8. Providing financial leverage
generate investments an order of magnitude greater than the purse
9. Creation of market demand
10. Attracting new expertise and cross-disciplinary solutions
11. Driving regulatory reform
12. Inspiration, hope, and intelligent risk taking.
Where Do Prizes Make Sense?
1. You have a clear understanding of your target, but not the method to get there
2. You have a large enough crowd of innovators to tap into.
3. A small team is capable of solving the challenge.
4. You are flexible on timeline, types of solutions, and who might win
*5. You are flexible on who owns the intellectual property at the end. *
most XPRIZEs, the IP is retained by the winning team, and the prize sponsor backing the competition is doing so for the purpose of publicity or to bring real change to the world. This is not necessarily the case for HeroX challenges, where the IP can be owned at the end by the challenge sponsor.
The Big Three Motivators
Key Parameters for Designing Your Incentive Challenge
1. Simple, measurable, and objective rules
2. Define the problem, not the solution
3. Pick the appropriate structure
- Past the post. *
• Past the post with a deadline
• Bake-off with a minimum performance threshold
4. Addressing market failures
5. The proper balance of audacity and achievability
6. Purse size. Purses come in all sizes. A typical XPRIZE purse runs from $2 million to $30 million, while the average HeroX challenge ranges from $10,000 to $1 million
*7. Persistent media exposure over time for prize competition. *
8. A telegenic and captivating finish
9. Multiple purses and bonuses
10. Launching above the line of super-credibility
11. Global participation/open to all.
12. Prize timelines and deadlines
If the IP is retained by the team or put into open domain, then the prize is considered philanthropic and the prize purse is typically tax deductible
there are four variants worth considering:
14. Incorporation of a back-end business model into the prize design
15. Writing the final set of rules
At the beginning of a competition, we propose a set of guidelines that are publically distributed and open for comment. There is extensive discussion with the teams and then, months later, the guidelines are converted into a final set of rules
The Step-by-Step How-To of Your Incentive Competition
1. IDEATION. WHAT IS THE PROBLEM YOU WANT TO SOLVE?
*What might the world look like after the prize is won? Work to identify the market failures that led to this impasse. Peel back the layers and determine what’s at the core. *
2. GUIDELINES AND METRICS. WHAT PARAMETERS ARE YOU MEASURING?
3. THE OTHER DETAILS: NAME, PURSE, DURATION, AND IP
4. POLISHING YOUR PRIZE DESIGN
5. LAUNCHING YOUR CHALLENGE, REGISTERING TEAMS
6. OPERATING YOUR CHALLENGE
7. JUDGING, AWARDING, AND PUBLICIZING
Over the course of the last few years I’ve defined my own massively transformative purpose. After a few iterations and false starts, I find that I’m happiest with the following: “To help entrepreneurs create extraordinary wealth while creating a world of abundance.”
The exponential technologies discussed in part one give us the physical tools for radical change, the psychological strategies described in part two are the mental framework for success, and the exponential crowd tools that fill part three provide all of the additional resources (talent, money, and so forth) needed to cross the finish line.
Afterword: Next Steps—How to Take Action
AFTERWORD NEXT STEPS—HOW TO TAKE ACTION
Bold Summary - Four Minute Books
Lesson 1: The power to change the world is in your hands, right now.
Lesson 2: The businesses with the highest impact on the world will rely on exponential technology.
Lesson 3: You can use the skunk methodology to build your business quickly.
Review: ‘Bold’ by Peter Diamandis and Stephen Kotler
Bold is a three-step introduction: part vision, part motivational sermon, part how-to manual
The vision part is familiar from Abundance, an earlier book
The middle section gives the book its title and its core. In the world that is now emerging, says Diamandis, failure is more likely to result from thinking too small than too big
An example of Diamandis’ advice: aim for what he calls “super-credibility”. If you have an idea that stretches normal credibility, then there is a danger no one will believe you can achieve it. His response: raise your sights even higher and shoot for the moon. At that point, people become so excited they clamour to get involved, making it reality.
Summary: Bold - Peter Diamandis | Outsource Accelerator
This book is an extensive how-to guide on how to use exponential technologies, crowdsourcing, and crowdfunding.
The first part focuses on the exponential technologies that are disrupting today’s Fortune 500 companies
1. Think “Exponentially”
Six D’s of Exponentials
2. “Skunk Works” to change the world
3. People who changed the world
Common characteristics of these entrepreneurs
Types of Crowdfunding
5. Incentive Contests (X-Prize)
VI. Other Learnings to Look Out For
1. To change the World
2. Google’s Eight-point Innovation Principles
VII. Personal Takeaways
VIII. Final Words
Notes From BOLD -Peter H. Diamandis and Steven Kotler - BEN AUSTIN BLOG
Genomics and Synthetic Biology:
The BOLD mindset
Skunk Works (The Secrets of Skunk):
Ways to Increase Performance (BOLD Performance):
The Remaining 7 Rules:
Money is not a great motivator
Humans Top 3 Motivators:
Entrepreneurs should decide their Autonomy, Mastery and Purpose early and plaster it on their walls. 2010-01-11-RaoPinkDrive
Why Google Thinks Bigger
The Stone Soup Analogy
How can you create super credibility?
Passion and purpose scale.
The Amazon Reasons for success (steal them)
Billionaire Wisdom: How to Think Like Elon Musk
Billionaire Thinking is about:
The Two Cognitive Biases That HOLD us BACK:
Richard Branson’s Success
Creative Asset Development
Crowdsourcing Best Practices:
Types of Crowd funding:
Who Should Do It?
Why Do it?
Key Steps for Execution
The Galaxy Zoo Example:
Book review: Peter Diamandis’s ‘Bold’ a reminder of how entrepreneurs will control the world’s fate
a new wave of planetary disruptions is about to occur. The new asteroid is called “exponential technology.” It is going to wipe out industries
That is the premise of a new book by Peter Diamandis and Steven Kotler, Bold: How to Go Big, Create Wealth and Impact the World. It makes bold predictions and teaches entrepreneurs how to thrive in the same way as our mammalian ancestors: by being nimble and resilient.
In their previous book, Abundance: The Future Is Better Than You Think, Diamandis and Kotler discussed how advancing technologies are making it possible to solve problems that have long plagued humanity, such as disease, hunger, and shortages of energy.
about three years ago, I joined the faculty of what is effectively an “abundance think-tank,” Singularity University, which had been founded by Diamandis and legendary futurist Ray Kurzweil. I learned that the future that Diamandis described in Abundance is actually coming true — and doing so faster than we would expect.
But I have also come to fear that Singularity University’s futurists are overlooking some of the risks in exponential technologies
The key premise of Bold –that entrepreneurs can solve global-scale problems — is based on a framework called the “six Ds of exponentials:” digitalization, deception, disruption, demonetization, dematerialization, and democratization.
Digitalization. Everything is being digitized these days, with the pace of information exchange increasing and causing acceleration in the pace of innovation.
Disruption. This is what happens when an innovation creates a new market and disrupts an existing one.
Deception. This is a period during which exponential growth goes mostly unnoticed and incumbents downplay the threat of advancing technologies.
Demonetization. Technology makes things practically free.
Dematerialization. Technology advances are making entire product lines disappear.
Democratization. The cellphone used to be an object of luxury—for the privileged few. Now, practically every family in the developing world owns one.