Book Review: Only The Paranoid Survive

This time I opted for a classic of business literature. The book is called Only The Paranoid Survive and was written by former chairman and CEO of the Intel Corporation Andrew S. Grove.

When the book was published in 1996, both the internet and myself were in our infancies. I was finally made aware of Only The Paranoid Survive by a blogpost written by venture capitalist Ben Horowitz (@bhorowitz) entitled  Peacetime CEO / Wartime CEO. Horowitz (@bhorowitz) describes Grove as a typical "Wartime CEO".

Strategic Inflection Points
Drawing heavily on his experience as a CEO of the Intel Corporation Andy Grove outlines his idea of "strategic inflection points". These are the points in the life of every company when its business changes so profoundly that the whole company is at stake. Usually such changes are brought about by one of Michael Porter's (@MichaelEPorter) classix six forces: Competitors, suppliers, consumers, substitutes, potential competitors and complementors (for those familiar with the five forces, complementors have been added later). When such a forces changes its magnitude by roughly ten times ("10X Force"), you can be sure, you are facing a strategic inflection point.

Recognizing a Strategic Inflection Point
It is not always easy to recognize a strategic inflection point. After all, if everybody recognized them early on and was well prepared business journals would probably face serious issues. Grove argues that the only way to surely recognize a strategic inflection point is through broad and intensive debate. As a board member listen to striking news from your frontline employees and your salesforce, as an employee or middle manager report oddities early on and if your gut feeling says there is something in the dark, listen to it; after all your gut feeling might save your company. Gather data to analyze the situation early on and try to stick to the facts despite the countless emotions involved in every big change.

Navigating a Strategic Inflection Point
Andrew Grove sees navigating a strategic inflection point as a two-stage process:

Stage 1: Experiment: While you may not know the answer, someone in your company might know, or at least someone might be able to find out. Provide room for experimentation and let failures happen at an early stage of a strategic inflection point. Failures are much cheaper now than later. Sometimes you might also want to hedge different strategies or keep watching an emerging technology.

Stage 2: Set the direction: After you have experimented enough to reach a sensible conclusion, go for it with all the conviction you can afford. After a period of 'chaos' it is important to set a clear direction and move towards the end of a strategic transition even if you might not be sure how exactly the company will look afterwards. Grove describes this very imagniatively:

"When I think about what it's like to get through a strategic inflection point, I'm reminded of a classic scene in old western movies in which a bedraggled group of riders is traveling through a hostile landscape. They don't know exactly where they are going; they only know that they can't turn back and must trust that they will eventually reach a place where things are better."

This book may be judged 'old' by conventional standards and chapter 9, in which the author discusses whether the internet is a strategic inflection point or just noise is rather funny to read with all we know by now. However, the theory of strategic inflection points is still very up-to-date and important. Only The Paranoid Survive is an insightful, fascinating and quite short read that is definitely worth your time!

Currently, I am reading The Moral Landscape by Sam Harris (@SamHarrisOrg). Follow me on Twitter and share your thoughts!

Book Review: Wired for Thought

Here's my latest book review for Wired for Thought: How the Brain is Shaping the Future of the Internet by Jeffrey M. Stibel (@Stibel). Let me share some thoughts about this extraordinary book.

Brain scientist and Internet entrepreneur Jeffrey M. Stibel (@Stibel) presents a provoking hypothesis: “The Internet is a brain. By this I mean that the Internet is more than a reflection of intelligence; it actually manifests intelligence.”

What the book is not

Wired for Thought is neither a grand unifying theory nor a comprehensive explanation of everything you need to know. Not with respect to the Internet and not with respect to the brain. Stibel (@Stibel) eloquently connects some of the dots that form his seemingly far-fetched hypothesis. Yet, there are too many dots for a book with roughly 200 pages and the interested reader is left with many unanswered questions. Indeed, Wired for Thought is not the holy book of the Internet, yet it is inspiring – tremendously inspiring.

“The Internet is a brain”

Let me give you one example, inspired by Jeff Stibel’s (@Stibel) book, which will show you how the Internet is like a brain. Consider the words apple, mobile and cell...

If you are now thinking of the iPhone you mastered a task that is too hard for most computers. You realized that apple refers to a company rather than a fruit and mobile and cell are short forms of mobile phone and cell phone, respectively. What happens in your brain is that a set of neurons is activated and this set of neurons is connected to the set of neurons representing the idea of the iPhone. Consequently, these neurons are activated too and you come to think of iPhone. That sort of intelligence is what makes us intelligent and computers – well, computers.

Entry of the Internet: The Internet has that form of intelligence. If you follow hyperlinks containing apple, mobile and cell you will eventually hit a website with information on the iPhone. Advanced search algorithms are even able to recognize that you might be looking for an iPhone by crawling through the pattern of hyperlinks. These hyperlinks are the dendrites of the Internet and the websites are its neurons. The structure of the Internet eventually resembles the structure of the brain.

Are we doomed?

OK, the Internet is a brain. Are we doomed? Will it hook our brains up to machines and create a matrix-type of future? Fortunately not. But Stibel’s (@Stibel) book does provide us with some insight about the evolvement of the Internet, its strengths, weaknesses and its eventual limits. While I cannot write about all of these insights here I have discussed the limits to network growth in an earlier blogpost. If this does not satisfy you, get the book! It is a great read and definitely worth your time!

Currently I am reading Brainsteering: A better approach to breakthrough ideas by Kevin P. Coyne and Shawn T. Coyne. Follow me on Twitter to get the news about the book review!