My Response to “All Hail the Generalist” In HBR

 

Read the article here: All Hail the Generalist – Vikram Mansharamani – Harvard Business Review

Hooray generalists.

Moving to silicon valley five years ago created the personal upheaval I expected and craved. What I didn’t expect was the upheaval that occurred for me professionally due to the intensity with which many valley professionals specialize.  Business and culture here tend to prefer technology specialists. They are uber talented and rightly desired by firms.

I became painfully aware I was not one of them.

It took me one role with a startup run by conflicted leadership, another role with a small business run by an out-of-depth CEO, a valuable experience with Cisco and earning an MBA before I settled into a role where I can do well without needing to specialize in (to me) some kind of arcane technical discipline.

I had a fairly alarming and humbling recalibration process and honestly, felt like I would never find my place here.  Of the five years I’ve been in San Jose, I’ve spent 14 months unemployed.

I appreciate the perspective offered by this article and my slighted ego takes comfort in the nod. However, I don’t think we need to swing from the side of specialization to the side of generalism. Both have great value in an organization, particularly in the valley where technologists and polymaths ascend to positions of legacy, if not fetishism.

Silicon valley lauds the technologist and the polymath at the exclusion of seeking a kind of balance where both specialization and generalism work together — without the usual eye-rolling, thumb-jerking “those guys…” contempt — to develop a more integrated approach to work and creation. I don’t think firms should aspire to the supposed ascendancy of the generalist. Firms should aspire to integrate them both into a solid business model, organizational structure and culture.

Cannot. Stop. Laughing.

Kids Redo Sabotage Video, Better Than The Original (But Only Cuz the Original Was First)

Kid’s Sabotage

Beastie Boys Sabotage

How To Get Out of A Speeding Ticket

There are many approaches to getting out of a ticket. This is a transcript of a stop made by an LAPD officer. It is probably the most effective approach but you need to be cool.

Woman: Is there a problem, Officer?
Officer: Ma’am, you were speeding.
Woman: Oh, I see.
Officer: Can I see your license please?
Woman: I’d give it to you but I don’t have one.
Officer: Don’t have one?
Woman: Lost it 4 times for drunk driving.
Officer: I see…Can I see your vehicle registration papers please.
Woman: I can’t do that.
Officer: Why not?
Woman: I stole this car.
Officer: Stole it?
Woman: Yes, and I killed and hacked up the owner.
Officer: You what?
Woman: His body parts are in plastic bags in the trunk if you want to see.
The Officer looks at the woman, slowly backs away to his car, and calls for back up. Within minutes 5 police cars circle the car. A senior officer slowly approaches the car, clasping his half drawn gun.
Officer 2: Ma’am, could you step out of your vehicle
please!
The woman steps out of her vehicle.
Woman: Is there a problem sir?
Officer 2: One of my officers told me that you have stolen this car and murdered the owner.
Woman: Murdered the owner?
Officer 2: Yes, could you please open the trunk of your car, please.
The woman opens the trunk, revealing nothing but an empty trunk.
Officer 2: Is this your car, ma’am?
Woman: Yes, here are the registration papers.
The first officer is stunned.
Officer 2: One of my officers claims that you do not have a driving license.
The woman digs into her handbag and pulls out a clutch purse and hands it to the officer. The officer snaps open the clutch purse and examines the license. He looks quite puzzled.
Officer 2: Thank you ma’am, one of my officers told me you didn’t have a license, that you stole this car, and that you murdered and hacked up the owner.
Woman: I’ll Bet you the liar told you I was speeding too.

Renting Prosperity – WSJ.com

When Michigan’s housing market started its downward slide in 2003, I started to wonder if home ownership really is the pathway to security that it had been for many families in the past.

Perhaps for those who buy and hold their homes for several decades, the promise of home ownership remains. But for those who have recently purchased homes or those who have upgraded homes a few times, I have a suspicion that there are at least three factors that make home ownership less of the “no-duh” purchase it used to be:

  1. the market is riskier and has yet to stabilize
  2. repeatedly moving from house to house means owners spend more years in the front end of the amortization table where most of their payments are loaded with interest
  3. owners can no longer count on gaining equity through appreciation to offset the dominance of interest in the first seven years of the mortgage

In an expensive and unstable market like the San Francisco bay area, I like the safety of renting a home. Fortunately, I was fired from a job the day before we were going to buy a house in Santa Clara. Had we purchased it, we would have lost about $200,000 in market value. That experience sensitized me to the shocking risk of home ownership in coastal California.

People who bought homes in the past three years had in mind the previously-reliable maxim that buying in a down market was a good idea. The problem was that the bottom didn’t quite arrive -it kept dropping. This also sensitized me to the risk of ownership.

I once read that one should buy appreciating assets, i.e. homes, and rent depreciating assets, i.e. cars. We’ve owned two homes and leased eight BMWs with that philosophy. But now I have inverted those two: lease a home and buy the car. Why?

Because risk has become more important to me that appreciation or depreciation. I want to have the financial flexibility to adjust to a market by moving if necessary and to leave it easily without penalty or to buy a car and own it long term. If I own my car, I free up money that would be committed to a payment and that allows a bit more financial agility to adapt to riskier situations.

This Wall Street Journal article discusses the emerging trend of renting homes rather than buying them.

For an increasing number of Americans, though, it simply makes more sense to rent these days. According to Moody’s, by late 2011 it was cheaper to rent than to own in 72% of American metropolitan areas, up from 54% a decade ago. And the more people who do it, the more socially acceptable and desirable it becomes. The decline in the ownership rate means that about three million more households rent today than did at the height of the bubble.

It’s tempting to view the rise of rentership as an economic step backward. Renters can’t build up equity, and they have less control over their living standards than owners. Renting is generally seen as something you do when you’ve failed as a homeowner or are not yet ready to be one. But I’d argue the rise of rentership is a sign of a system adapting—albeit too slowly—to new realities.

via Renting Prosperity – WSJ.com.

Letters of Note: Iorz feixfuli, M. J. Yilz

Referenced Article: Letters of Note: Iorz feixfuli, M. J. Yilz.

I’ve been thinking lately about how texting and ghetto slang has changed the spelling of words. Spelling Nazi’s come in and correct you’re spelling and tell you your an idiot for not spelling properly and that their should be more emphasis payd to the proper spelling of wordz.

If we are honest, we will consider the possibility that the notion of “correct spelling” is fairly ridiculous. There are many rules and a great number of exceptions. Homonyms, contractions, vowels, consonants, synonyms. All cause problems. Words aren’t spelled the way they sound or don’t even look look like they are pronounced.

For example: conceit. forfeit.

Does spelling really matter? If we allowed some flexibility in spelling variations, would it be such a big deal? Could we not determine meaning from the context of the word? I wonder if “contextual spelling” would make it easier to learn English, especially for someone for whom English is a second language.

Grammar probably does matter but right now, I’m not sure that spelling necessarily does.

This 1971 letter to the editor of The Economist makes an interesting point in a delightful way.
What do you think of proper spelling?

Writing Exercise: Write the First Word I Don’t Know

This is a scene I wrote tonight based on a new writing exercise I came up with. Using vocabulary.com, I will write a scene or story based on the first word I do not know (and which also sounds interesting).

panegyric – eulogic, encomiast
A formal, high-minded speech can be described with a formal, high-minded word — the word panegyric, which is a very elaborate tribute to someone. You could consider most eulogies as panegyrics.
It stands to reason that the original use of the word panegyris, from which panegyric derives, was to describe a public gathering in honor of a Greek god. The Latin, L. panegyricus, altered slightly to mean “public eulogy,” which around the 16th Century shifted to the French panégyrique, which meant “laudation.” In any case, the word today stands for high praise given in a speech or tribute as highfalutin as the word itself sounds.

A stilted silence seized the conversation. Milton, a man with a shiny pate pitifully ornate with greasy strands of hair, had realized five beats too late that he has mentioned the wrong name. Unlike others who might look awkwardly down at their plates, this group looked at each other directly, with foresight and intent, each attempting to read the others’ reaction to Milton’s faux pas. Infrequent light, eradicable flickering lights, tenuous amber vibrations unfolded on white plates, red meats and green and red salads. No one’s eyes averted and Milton did not feel shame in the silence. He had not been shameful but clumsy.
“I’m surprised…” and a shallow bright voice trailed off to a short silence. Still enough to punctuate the moment like punching a man in the stomach with a pillow between fist and abs.
Glances flashed across the table in a rapid network of emotionneurons, looking for revulsion, acceptance, doubt, forgiveness, whatever the current status may be. Without a clear lead, they looked ton one another to follow.
Milton’s shiny forehead was bowed slightly as he seached his cache to wonder how he could have let this happen. What led up to it? That memory that reminded him [of Calvin]. Once the memory is recalled, the name, the face, the recollections of times before banishment, it is difficult not to think of him. One cannot not think of something once they have thought of it. Milton remembered trying spastically to twist himself away from the vibrating sheath through which the memory of Cavin [yes cavin] managed to permeate itself while being pushed away until Milton, casually let him through the sheath of memory into the front of his mind then wetly on his tongue.
“… That we would mentiion him?”
The eyes of the bright-voiced woman closed, opened, closed and opened in an acquiescent code of acknowledgement.
Someone reached to take a drink of wine and in quick conformity, everyone else brought their wines, scotches, vodkas to their lips, a mass gesture of fidgets.
“Tom would know what to say…”
Gregory Townsend brought his glass down to the table with emphatic force, the heel of his hand both cupping his scotch and softening the thudded percussion.
“Tom was a goddamned encomiast. Tom would laud the nature of Lucifer, tumbling and twisting stories and facts so that he be not a tempter but an opportunist. We don’t need perceptions for this.”

It was too much. His palms opened flat and angled toward he breadth of the table to assure them and apologize for using more force than was necessary.
“Milton, you clearly were thinking of him.” Veronica Wells twirling a thick section of hair between her thumb and three fingers. Her eyes seeing his then leading his eyes across the table,  as if to remind him that this was his moment.
Thick Milton fingers rubbed over his bald skull as he leaned toward the table, head tipped down, eyes raised to Veronica. She had a memory of rehearsal, something plotted, planned. Milton stepped to the center where the dominante would be. He had no memory. Though it was him who culled Cavin to memory as they all sat at the table and had thought weeks before their dinner that it had been too long since they had mentioned it. Milton had not rehearsed it but he had planned it. As he drove, Cavin pressed into his mind. The dominance, the potency of the man, pushed against the vinyl membrane of memory, made it porous and now this moment bound them in strands of memory and resentment. Adrenalin surged, dread. The gawking wonder of awkward spectacle, stopping the traffic of conversation, words, rehearsed by each for days to assert personna.
Knives and forks, cups, glasses cascade in tinny, food-eating animosity. Cryptic dashes and dots of forks and knives tapping out staccato beats of rhythms of eating, chewing, drinking. Milton now hearing it all and falling into this unquenched desire for closure, for something that was true, credible, forgivable. Tom’s mighty chest, whose vested suit was the corpulent bodice of his power, thrust out at the table in the memories of them all. It was only their third dinner since.
Milton, covertly confident, crippled by ungainly appearance but welcomed by the thoughtful and attractive, stalled. Not from hesitation but from drama, to separate himself from Gregory’s … [whatever]. Milton chose.
“I was. Thinking. I took — I had a long drive in. Cavin… in my mind.”
A few others thought that if Milton’s attempt failed, they would try to gain Tom’s spot. Spinning, querying.
“Our grief is from two men. One who chose, one who died. This could be the last time we meet. We have to say the words we all know, we hide, we push deep down with our hands pressed flat, pushing from our throats to our stomachs. We stuff it and if we keep pushing with our hands, we will end. We are all too honest, if we prefer, than to pretend that this was the unforgivable. We are all too many liars too and if we let us, we will lie and never meet again.”
Some eyes turned to laps, some looked in the direction of the feigned laughter of an indifferent woman being entertained by the endless stories of her date’s perfection. Those who too had thought of Cavin during the day, who had been unwilling to press their hands down any longer, looked at Milton and invited him with earnest faces to say more.

Kaspersky: Mac security is ’10 years behind Microsoft’ | Apple – CNET News

 

Link to the article: Kaspersky: Mac security is ’10 years behind Microsoft’ | Apple – CNET News.

I expect to be corrected by Kevin, Tom, and Joel on this but I’m going to say this anyway.

I’ve heard OS X enthusiasts say for years that the OS is architecturally superior to Windows and that Microsoft’s long battle against malware proves the inherent superiority of Max OS.

I have argued on bimmergeek.com for years that Macs have been protected by security by obscurity until relatively recently. I have further argued that a legitimate case can be made that Windows actually has substantively better security specifically because it has been attacked relentlessly and updated by Microsoft for years.

Windows has been tested and proven in the wild. OS X has not. All OS X has are claims it is inherently superior.

Recently, there was an outbreak of Mac malware that is estimated to have infected 600,000 Macs and may still be active on 185,000 machines. I have been surprised that Mac adherents say that it wasn’t really OS X that was compromised but rather Java. The distinction is only meaningful to people interested in technology because the end result is that 600,000 Macs were exploited by malware and that’s really what matters to end users.

The article I cite for this post reviews some of the efforts that Apple will use to help protect users and those efforts are primarily functions of Apple’s “walled garden,” which I generally consider to be an effective means of protecting devices. It works well for iOS  devices but it’s a bit more flawed as a security approach for Macs.

With iOS, the only way to install applications is through iTunes or the App Store (assuming the device hasn’t been jail-broken). Not so with OS X. .dmg files and installation packages can be downloaded from any site that offers them. It’s a good move to require apps sold on the App Store to comply with sandbox rules but since the App Store isn’t the only source for apps, it’s not a complete solution.

The problem is that these technical solutions do not protect users from themselves. Most malware depends on “social engineering,” a term that refers to inciting users to bypass security measures on behalf of the malware. Users do this because they are unaware of what they are actually doing when they download an attachment and open it. Malware won’t conform to sandbox rules and if a user is persuaded to open it, there’s not a lot the OS can do until a threat surfaces and patches are issued.

I have been eagerly anticipating this time. We are about to see if OS X is truly inherently secure or if its market obscurity has enabled it to coast on false claims.

 

30 Amazing Sculptures Made out of Cardboard

30 Amazing Sculptures Made out of Cardboard.

I greatly enjoy the use of Durex boxes to build a cathedral.

 

 

 

 

 

HTC, Facebook jointly developing smartphone, say sources

Link to Article: HTC, Facebook jointly developing smartphone, say sources.

This article discusses yet another round of rumors that Facebook seeks to develop its own platform phone.

Why don’t they just make a Facebook application that isn’t a steaming pile of poo?

Trite Bumper Philosophy

I hate this trite saying. A lot.

I hate it because it’s a bullshit value of goodness. It’s supposed to inspire people to be kind and, if the bumper is long enough to contain the full maxim, inspire people to practice senseless acts of beauty.

It sounds so good but it’s fluffy, bullshit philosophy.

Goodness, kindness and beauty are not random or senseless. This tenet of bumper sticker philosophy leaves goodness, kindness and beauty up to whim or chance.

Instead, the message could be: Be consistently and thoughtfully kind to others and show them beauty through your life. 

 

3D Glass Plate Photos From the 1930s

 

Link to PetaPixel Article: 3D Glass Plate Photos From the 1930s.

Instaport.me Downloads Your Instagrams

Use Instaport.me to download all your Instagram images. You know, just in case you’re worried Facebook is going to eff Instragram up.

Caine’s Arcade | A cardboard arcade made by a 9-year old boy.

Caine’s Arcade | A cardboard arcade made by a 9-year old boy..

I saw this video bouncing around Facebook and blew it off because it’s a 10 minute film. But wow! What a great story.

Meaningless Web Marketing Collateral | Ziiva Products

 

 

Link to: Learning Management Software | Ziiva Products

I am working on finding candidates for a learning management system for my company. I have looked at the websites of somewhere around 300 LMS sites and it amazes me how poorly companies communicate what their products actually DO.

They just fill their pages with bullshit like this:

That’s what training directors asked for. Our response is Ziiva Prosperity.

Prosperity product suite brings flexible, easy-to-use tools to your learning and human capital initiatives that successfully deliver documented results.

That’s what CEOs and CFOs asked for. And Ziiva also responds to those needs with a scalable, affordable yet fully functioning LMS.

Ziiva offers a complete package to create, manage and report classroom, online and on-the-job training with Prosperity LMS, Prosperity Creator and Ziiva’s Course Libraries.

This says nothing about Ziiva’s products. It’s just marketing jibber-jabber that some twenty-five year old Communications and Marketing major learned to write in her Marketing Comms 390 class.

I’m pretty sure what CFOs and CEOs are looking for is a product that actually does something.

Commemorating Easter As Cranky Dave

Sometimes, it’s hard for me to separate religion from faith. I think of religion as a set of activities that I can do to make me feel good about myself spiritually (and sometimes, religion is what I do to make other people feel good about me spiritually, too). Faith is something at my core, the essence of who I am, that drives who I am and how I see myself and others in relation to God. The problem is, that even as I write this, my groping definition of faith feels vague and incomplete to me.

The fact that faith feels vague and incomplete while religion feels concrete and specific is probably why people gravitate toward religion more than faith.

I suspect that a lot of religion is oriented around good behavior, where “good” is defined within a society and within the community of believers that one associates with. Faith, while perhaps looking to God for the formation of a kind of goodness, is something that has less to do with good behavior in the moment and more to do with the long-term process of connecting one’s identity more fully with God than with the controllable things in the world.

This is not to say that goodness is immaterial to faith but it is to say that faith is primarily concerned about an audience of One whereas religion is concerned about an audience of many.

As with any tension in life, it is difficult to maintain a balance between two or more forces that cause the tension. Generally, people give in to one of the forces that cause the various kinds of tensions we live in. In the tension between religion and faith, it is easier to give in to the force of religion because it is most tangible, most understandable and therefore, most controllable.

In 1987, during my junior year at Michigan State, I decided to exchange my agnosticism for a beginning kind of faith. My agnosticism was really nothing more than a passive-aggressive stance toward God because I was angry with him about my life experiences to that point. Ever since I was a young kid, I had thoughts about God that, even though they were somewhat vague, had a single constant to them: I believed somehow that God was personal.

And that was why I was pretty pissed off at him and why I held off for 21 years a decision to give him a chance to bring some meaning to the fairly painful experiences I had as a boy. I was pissed because I couldn’t reconcile a personal God with the experiences I had in my youth. I’ve always wondered how I would’ve responded if I had possessed an impersonal view of God. How would I have responded to God if I thought he was just an Initial Cause, something that somehow spun up the Universe and then left us alone in all of this pervasively flawed, magnificent wonder?

Somehow as a kid, I made a connection between what I saw in the world and a God with personality, power, language and some kind of disposition toward people. I don’t know how to explain making that connection, but I still believe they are the critical characteristics of God that make God accessible and knowable.

In June this year, I will pass a 25 year landmark. For 25 years, I have been trying to better integrate my life with my belief in God. Honestly, the difficulty comes not from my love for God but rather from my inability to act in ways that give some kind of indication that God’s presence in my life has made a difference. For sure, when I compare myself today to the kind of person I was in 1987, I have grown a lot and I think I can say fairly that I am a better person than I would have been without some kind of faith in God to guide me.

Yet, after all this time of fairly intentional desire and effort to know God and to please him, I am still selfish, impatient, angry, distant, judgmental, intolerant and greedy. I am laaazy. Though there are parts of who I am that I like, there are also parts of myself that I hate, that I detest. And I hate that I cannot get rid of those parts. And by “hate,” I mean venomous, contemptuous hatred that I sometimes paradoxically direct at others, and at times, sensibly, I direct at myself.

So all this to say that for good and bad reasons, I tend to not get too engaged in Christmas or the Good Friday/Easter weekend. This is because annual celebrations don’t resonate with me. It’s because the birth of Jesus means less to me than that he lived among people and died in the effort to help us. He could’ve arrived suddenly and magically in a cosmic Jesus Prius — having not descended from the lineage of Jewish legacies — and I would still believe in him. The means by which Jesus came to earth is not that important to me.

What matters to me is that he lived.

And it doesn’t matter to me that we celebrate his death and resurrection at this general point in time every year. It’s mostly religious anyway. Chocolate bunnies and colored eggs aren’t symbols that connect me to God.

What tends to work more for me is to be reminded of the life of Christ through the year. I know this sounds like some kind of cheesy aphorism but it is generally true. I felt emotionally connected to God my first couple Christmases after 1987 but not after that. This is probably for two reasons: the novelty of God’s presence in my life wore off and I got back into the commercialism of the holiday.

I am a closet religionist. Dave the Religionist lurks in hidden places and once in a while, he outs himself. It is for this reason that I try to avoid the religious impulse and most likely, I over-compensate to keep religion at bay.

I think it is my badness, my obvious and not-so-obvious defects that compel me to avoid religion. Intuitively, I believe there is no intrinsic power in religious experiences. For other people, there may be power in their religion. For me there is not. My hope, then, has to be in a God who knows me and loves me. My faith is in a God who knows my deep flaws, who sees my hypocrisy and fallibility, and still doesn’t give up on me.

The funny irony of this post is that in the writing of it, I just realized I am reminded of Jesus Christ, which is part of the point of Easter Sunday. I suppose, though, the paradox is that it wasn’t the holiday itself that led me to remembrance but the act of writing — something which is deeply important to me — that called my mind and my heart to remember God.

So, today and for any other day in which you are reminded of God, observe it in a way that is personal and meaningful for you. Perhaps another way to distinguish religion from faith is that one is what you believe because others have told it to you and the other is what you believe because you have questioned it, played with it, rejected it, tested it and finally taken it for yourself, not because someone else told you to, but because it belongs in you.

And perhaps more importantly, there could be a few beliefs that people tell you should not or cannot exist in a person’s faith but you take them inside you because for you, they have meaning.  Religion has cultural momentum; faith overcomes that inertia. There are many examples in the scriptures that show people taking on a belief that was not well-received in their community but which was pleasing to God.

We have an audience of One. We each understand that One in different ways. That’s okay because truth isn’t necessarily found in conformity. Perhaps today can be a time when we clarify what that Audience means in our lives not because others have told us what it means but because we have found that meaning on our own.

I Totally Judge Companies By Their Websites

I’m evaluating learning management systems for work. I found a source of about 400 LMS solutions and am reviewing every single one.

My number one criteria for filtering them out: If their website is crappy looking, doesn’t say anything meaningful or has typos, I instantly bounce. They don’t get considered at all.

Corpo jibber jabber gets a quick DQ too.

  • seamless integration
  • best in class

Crazy Connectivity When Traveling to Monterey Bay Aquarium

A few months after we moved to California In January 2007, we drove down to Monterey to visit the aquarium. Of course, my bladder being what it is, I had to go to the bathroom shortly after arriving. As I angled toward the men’s room, I saw a friend of ours, Kellen, coming out of the women’s bathroom. Kellen was in eighth grade (I think) at the time. She was with her mom, Kathy and her sister, Lindsay.

We had not made plans to see them at the aquarium. We didn’t even know they were in California! So, we were able to spend a little bit of time with them before we headed back to Cupertino.

Yesterday, Tanya and I went to the aquarium for the day. While we were there, I saw this guy walking around the penguin exhibit.

 

 

 

 

 

 

 

 

 

 

 

 

I had to subtly stalk him to confirm he really was wearing a shirt that was for a color tour in Grayling, Michigan, the small town I grew up in. After assuring myself that he had been to THAT Grayling, I chatted with him for a couple minutes. He was from southern Michigan but had been on a train fall color trip. We chatted about Michigan a bit and then parted ways.

Then on our way home, we encountered this Toyota on the road (click to enlarge):

 

 

 

 

 

 

 

 

 

 

 

 

Not only is this car from Michigan (not that big of a deal) but it had a license plate from from  Spartan Toyota. This dealership is located in Lansing, where I lived for 22 years before moving to California.

So, I now wonder if future trips to Monterey Bay Aquarium will hold similar kinds of weird connections to my past.

Lottery Tipping Point

 

I’m fascinated by the excitement around a $500M lottery jackpot. I wonder what the tipping point is that causes people to purchase numbers when they wouldn’t do so ordinarily.

Is it a function of the specific size of the pot or of the publicity surrounding the size of the pot?

If it’s the publicity, I get it. Who wants to be left out? But if it’s the size of the pot, it makes less sense to me. Why is winning $500 million different from a $50 million or even $10 million pot? How does the size of the pot matter? What? $10 mill isn’t worth your time?

Anyone have opinions or informed perspectives as to why lottery excitement causes people who wouldn’t ordinarily buy tickets decide to do so?

The Build or Buy Decision

Personal Finance News, Videos, Reviews and Gossip – Lifehacker.

Businesses constantly need to make decisions relating to new capacities they would like to have and whether they should build the capacity themselves or pay for the use of a pre-existing capacity.

Individuals and families need to do this also.

Two popular tools used in business are the Total Cost of Ownership calculation and the Return on Investment calculation. These are quantitative measurements favored by accountants. They only have one problem:

TCO and ROI are usually shitty indicators of value. There are at least two reasons for this:

  • They are based on assumptions that are almost always biased toward the decision desired by the person or team making the calculation. Or they are based on assumptions that conflict with each other because the assumptions are formed by people with conflicting biases. Biases can be something as simple as an “industry standard” or an average or an assumption pulled out of one’s nether region.I don’t think I’ve ever participated in a TCO or ROI calculation that was free from bias. In other words, TCO and ROI don’t often map very well to the real world.
  • They don’t consider other costs that are qualitative or ambiguous. Examples of those costs are opportunity cost, which can be qualitative, the emotional cost of a decision (e.g. morale, the negative emotional consequences when there is low buy-in on a decision, the realities that people often buy things simply because they want it, etc.)

Many years ago, I was involved in helping a leader justify a substantial software purchase. I was in favor of the purchase but there was a lot of resistance to it. I did a lot of research — more than the research conducted by those who opposed the decision. We debated and we had some different ideas of TCO and ROI but in the end, my position was better-argued because I tailored the argument to the biases of the leader. Those opposed based their arguments on “the better system,” which coincidentally was the one we had in place. The leader chose in favor of the purchase.

One of those people who didn’t support the decision later complained that it was a waste of money and we just did the project because it’s what the leader wanted. I asked the individual if he had ever bought a video game that he couldn’t afford (because Xbox was one of his passions). He replied, “Sure.” I asked him how he justified it. He said, “Well, I just charged it.”

I told him, “Leaders are just like you. They buy things because they want them. The only difference is that their checkbook is bigger than yours.”

That’s really what the build or buy decision comes down to: desire.

And the predominance of desire in a purchase decision is what is always ignored in the evaluation of the decision. Yes, desire is assumed at the beginning of the process but it’s not part of the value calculation.  Once the decision to build or buy is made, the level of desire isn’t part of the calculation at all. In other words, there is no factor in the ROI or TCO calculation that attempts to weight and value the level of desire involved in the acquisition of a new capacity.

You could perhaps argue that if your hurdle rate is 12% and the ROI is less than 12% but still choose to build or buy the capacity, you have implicitly factored desire into the calculation. But that begs the question: If you were going to do it anyway, why go through the ROI motions?

I tend to ignore these article not only because they deny the value of desire but they ignore another important kind of value.

This article bases the decision to DIY or hire someone solely on a pro-rated amount of your net salary. They don’t take into consideration whether you have the talent to do it or whether it will actually take more time to DIY (because it ALWAYS takes more time to DIY). Further, the calculation doesn’t consider the quality of the results. Sure, I might be able to paint my walls but every time I’ve painted the walls, I have regretted the mess and the process because at the end of every painting project, the fact that I did it myself is very apparent. So too would the quality have been apparent if I had hired someone to do it.

In addition, there are the potential consequences from a DIY effort: frustration, unfinished projects, arguments with friends and loved ones that last during the project’s duration, damage to property as a result of inadequate skills, the costs of single-use tools that can’t be used in future projects, personal injury, liability from poor work that adversely affects others, and so on.

So, I get the intent of the article and the calculation tool. But it’s incomplete because it doesn’t take into consideration that there is much more at play then merely a pro-rated cost based on one’s net income.

Let me put it this way. I worked for a man who invited me into the real estate appraisal industry. We had some great talks as we worked on appraisals together. Kern told me that he was a bit of a hellion in his youth and as a result he was always poor. He had to fix everything he owned. The one thing that caused him to change the way he lived his life was he decided he didn’t want to have to fix something again. He wanted other people to fix his things. And that meant that he needed to approach his life more responsibly.

In most cases, I would rather pay someone else to do something, even if I could “do it myself” for less money. And that’s because I have found that in the long term, it is better for me emotionally, circumstantially and financially.