Entrepreneur 2 be

[Pic by mysza831]

Just by reading TechCrunch every day you can’t help but wonder, “How the hell are there that many companies getting funded?” And that is just the tiny bit that is mentioned on TC. I shared that observation with my friend Alek, who jokingly (or not quite so) answered, “We’re in a Startup bubble :)”

That got me thinking on the issue. There are a million definitions about a bubble, but generally - “a situation where market prices are unsustainably high”[I don’t think there is such a word, but I got it from Wikipedia, so i guess there is]. Usually that happens as a result of overinvestment and development growth due to speculative inertia. Also, it is not explicitly stated, but a bubble is often associated with a Bust. As a matter of fact your are probably reading not because you want to know about the bubble, but because you are afraid of the Bust. But let me explain why there won’t be one.

I don’t need to bring too much data to convince you that Internet Startups are quite hot today. There is an army of angel investors that occupy the range of $0-$1mln along with VC’s that are targeting investments as low as $500,000. News sites keep coming up with brand new company names. Strange simplistic products become hits in an instant[away status products?]. Early stage venture capital companies like Ycombinator seem to be extremely popular lately. Applications grow in times each consecutive year. Even colleges have a standard practice of organizing competitions and funding the winner teams. Ladies and Gents, there is a gold rush if you haven’t noticed yet. But a Bubble & Bust? Nah. Because the internet market is like no other market:

There is a tremendous growth. Just like in real estate where developers build, people happily and readily buy, developers make more money and keep building. The one difference is - in the internet market new people just keep coming. No geographical area has such unbelievable influx of clientèle. New people get hooked with bandwidth every second. People that have it increase their use of internet all the time because there is more stuff to do online. And more people means more developers and more products and more stuff to do. When does that end?? When supply of new people dries up. Not any time soon, I will tell ya that. Most of the internet users come for about 15 countries and total less than 1/2 billion. With more than 6.6 billion people there are quite a lot of future entries. With such dynamically increasing demand, how can this market be saturated?

Another interesting characteristic of the internet market is the movement speed of huge masses that can pick their belongings and move in a different building. Switching between products (email clients, social sites, tools, etc) can be done in incredibly short time by incredibly huge masses. Or for that matter adopt a new product/mindset. Think Gmail, YouTube, Friendster-MySpace-Facebook. That means new developments can target not only the tourists but also the locals. True, old buildings get tossed in garbage but so what? Owners made money, now it’s time for another venture or other entrepreneurs.

The third interesting thing is that the internet market sucks off the real world. Or should I try to present it better - is in symbiotic relationships with the real world. There is a constant addition of new ideas that are based on establishing the connection between the real world and the internet. Online TV, USPS online tracking, mp3 (players) and a gazillion other things are being now invented that make a wonderful bridge between the virtual and the touchable. With every new such feature fuels the internet, revamps the market and gives rise to other ingenious ideas. Net has catching up to do with real world and there’s plenty of opportunities for sucks off people and products from the real world.

It would seem naturally to make parallels with the Bubble in 2000. “If it happened then, it may happen now”, you would say. It’s quite different though - 2k was a flop because people realized the power of internet before the audience was ready. Huge speculation positions were taken while nobody believed in the Internet. Everybody jumped into making products that weren’t bad (and would probably have made money today) but the crowd was not convinced that internet will be part of their lives. Today, IT is not only a source of information, but a means of entertainment, and a medium for communication and social enterprises. The internet is becoming more and more an irreplaceable tool for almost everything. Before 2k it wasn’t so. As it happens very often - technology was ahead of mindset. Investors and entrepreneurs got burned. We now know the power of fire though, but we also know how to handle it.

Time IS going to come when there will be a slowdown due to the underdeveloped countries that can’t wire themselves. The big powers that could afford to wire themselves are doing it and when they are done things will indeed slow down. The Balloon will deflate but not Bust. The reason for this is that it has become tremendously cheap to build, scale, and maintain a product. If in the past the main investing players were VC’s with millions, today it is everybody that has an extra 10,000 or 100,000. That has huge implications on the Bubble effect because while before 2K valuing the market was based on few VC investments and few believers and a crazy amount of speculation about the future, today there is one source of information - the internet market. It is the ultimate measuring stick. It is composed of millions of businesses and small websites each of which has a pulse. We can measure that pulse and we can go in hibernate mode if needed. But we won’t default.

So my prediction is that Startup culture will keep growing healthily. It will also make deep changes our perception of careers. As the internet gets more integrated with the real world businesses and as those connections get systematized, it will become quite easy to start a regular business too, like never before. It will become much more common for people to have the mindset of business starters than company employees. No bubble, no bust - just growth, growth, growth.

PS external factors like World War or Net Neutrality, etc. not considered

When I started this blog I set off to create a full story of my entrepreneurial struggle. I have been working on it mostly implicitly by writing out my thoughts and keeping up book reviews with what I read. I feel though that an explicit update is needed every now and then, so here is one that explains my current whereabouts.

After having been through a billion ideas and finished none, I decided to jump into ONE thing ONLY and pull it off till the end. My choice was Snartle.com, the language learning site since I trust my guts and feel like my theory of how a mind is able to suck new information will be right. In addition, the market is growing like crazy. Livemocha (got 2mln funding I believe) and SpanishPod both made the Times the other day, and I think neither is really good or with much innovation in methodoly of learning. They just are there and in such market whoever is there makes it (apparently really well too).

But I mentioned how I have been struggling between looking for funding and making it myself. We finally settled for funding, and no surprise - it feels like we chose wrong. On the other side, I am pretty sure it would have felt the same way if we went with building it. So funding is planned through winning the the Merrill Lynch competition and if we don’t win it (which I feel we have decent chances) I will be totally lost. If I then decide to build it, I would have gone BOTH paths to reach the target. Why didn’t I just tried making it off the beginning? My guilty consciousness will chase me for a long time. Though if we do win the 60,000 from Zicklin, then…..then there’s going to be more posts.But for now, got no product - just a business plan ‘in construction’.

So far so OK. I feel like I am on the right track and I push. Before I know it though, I am filling a new YC application - this time it was supposed to be just a joke. As a project, we decided to use our first launch (for five years!) - a blog. A blog we launched for all this time! It was a music blog and it felt good to put some of our favorite music online and listen to it and share with friends. Turns out Alek was serious about the YC app, which he filled quite diligently, and that he has serious plans about it. I realize now our music blog was the beginning of a new startup, which we will be launching in … 2 weeks?!@# How da hell did I get involved in another startup again?! Our blog, you can find at thefeelgood.com. It has got some good music today, and stay tuned for the startup launch.

Meanwhile more ideas keep coming to me (yes, they will all end up here). One of them seems to be stuck with me for some time. I haven’t shared it online because I believe I may decide to do in the near future when I have resources.

Actually resources is what I really wanted to talk about. I have no job. Ever since I decided to work on ONE thing I have been trying not do anything but work on the startup, which meant absolutely no wasting time on crappy external jobs. Now though I am running out of money and this drives me nuts. My budget has thinned out to mere $100/mo that I can live on besides my fixed costs of another $200 (subway, cell, credit card). I am basically surviving on $400/mo in New York and this is crazy. What is crazier is that soon the last few hundred bucks that I have will run out. I have to take a job but what I can do is apply at my school for a job under $10/h which is just a waste of life, or I can work some side projects as a freelancer. I used to make Flash sites like this one, but now I think that connection soured up. It’s nuts to think how people that work the crappiest jobs have more money than me. It’s a psychological breakdown. I may have to crack open and take a job or I will starve. ‘Die’ is probably the right word here, since I am already starving.

I already talked about the Up’s and Down’s of the roller coaster and here is another wonderful example of a down. It is quite a down this time - deeeeep and loooong. I am miserable and I am barely surviving. And it seems like it will keep going worse. If it wasn’t for the possible upsides that I see in a few months from now, I would have given up. But that insane feeling that “I am almost done” with something and soon “it will pay off” is just not going away, and drags me down, and down, and down.

Let me mention some more just for a little color. My wisdom tooth is growing - as to be taken out some time soon and yes, you guessed it - I can’t pay for it. My stomach pains me. Hmm..yes, I should be eating better food. But what better food when I am eating anything I can find? I just cut my hair on my own, since I have to otherwise pay 15 bucks, with which I can eat at least 3 times. I have never had such attitude towards money saving but times change and when you don’t have money, elasticity can get practically to zero;

Damn that UP should be right around the corner because I am in B I G trouble…

Tennis is pretty much like any other sport - how good you are depends not only on accuracy and strength but also on the variety of tricks you can pull in different situations. Wider the variety of shots you can perform, the higher the probability you will maximize efficiency by choosing the right one. Now this is where the person’s character begins to matter. Some like to concentrate and master perfectly the basics they have been taught, but others enjoy trying shots between legs, behind their back, demi-volleys etc. Your character defines the way you will behave at training and the type of stuff you will learn. In a match against a smart opponent, your wonderfully mastered forehand doesn’t do much because you will barely get the chance to use it.

Same goes for startups. To be good at a startup you have to have a wide range of tricks under your sleeves. But how do we get them? Well, experience obviously. Here’s one specific way to build experience: we live in a world of rules and laws. A lot of them are written down and can’t be crossed, but there are many many more that are not explicitly stated and under certain circumstances CAN be trespassed. Those are the ones you should be testing, exploring, and sizing. Here is what I mean:

Nobody ’should’ cut a line in a store. But if you cut a line 10 times you may figure out that 5 out of those times people really don’t mind it. As a whole you are quite ahead of everybody. We can argue about ethics, but here the principle of testing is important. My little brother is extremely good at pushing limits to find the size of the playing field so he can use the whole width of it. He, for example, would drive you nuts just to figure out at what point you break. Then he knows that and can keep you on the edge always, thus maximizing his own proceeds. Again, this is an awkward example, but this applies also for how to deal with investors, negotiation, determining your burn rate and so on.

It’s hard (and probably pointless) to try and name specific steps you should be taking for ‘exploration’ but in any case you should be aware of it and watch out for those opportunities. Easiest way to spot them is when you meet an obstacle. Then you should just turn around and think, “Which soft limits can I cross so that I can get through this?” What is harder is getting at that ’state of mind’ so you are automatically thinking of what you can do extra and go further even before being roadblocked. It doesn’t come naturally and you have to impose it consciously, but after a while it becomes your nature to see extra solutions, stop less in front of barriers, and enjoy life and all of it’s pleasures to the max.

Founders At Work
interviews by
Jessica Livingston

ISBN-13: 978-1590597149

Lately, while reading, I’ve been underlining sentences and passages that are worth thinking about, sharing, or just rereading. I mark their position in a book by stickers. I don’t have to tell you how many things you can learn in this book - my copy has 53 tabs and looks like that:

Here is my read of it. In a To(Not)-Do list. Remixed.

Luck

• Get lucky. I am not kidding. One of the things I kept noticing is how everybody got lucky at some point, “we lucked out we found a great CEO”, or “that deal was total luck, came out of nowhere” etc. After all, if 1/10 startups succeed, if you do ten there is no way not to get lucky, is there? (statistically significant)
• There seems no luck, so don’t wait for it. It looks like a lot of the pivotal things happen on their own, but in reality it’s the result of your actions that you couldn’t predict. A lot of the founders seem to have ’caused’ good luck on themselves.

Qualities

• Do not give up. Jessica Livingston starts off with this point in the introduction, “In fact, I’d say determination is the single most important quality in a startup founder….Perseverance is important because, in a startup, nothing goes according to plan.” Unless you are lacking motivation, you should keep that on a sticky note on your screen.
• Think unusual ideas and don’t be afraid. Here’s what Buchheit (creator of Gmail) said about the googles, “…they are very open to crazy ideas - more so than almost anyone I’ve ever met.”

Marketing

• Make your product so good so it can market itself, I wrote about it. Here is Blake Ross on it, “It turns out that marketing is just making the product good enough that people spread it on their own, and giving them ways to do that. It’s a lot easier and more natural than I thought it would be.” In that category falls the story with choosing the right market. Marc Andreessen also said it in this post.
• Hire a good PR firm. The more I think about it, write business plans, and make projections it seems that direct advertising is just not the way to go. Word of mouth with PR help can do the trick. Paul Graham Says PR worked for them.
• Do not write business plans as a guidance of what you should be doing. It seems to be more of a marketing tool, “You can easily add a couple of zeros everywhere and sell the same thing to people. Instead of 10 percent market growth you make 20 percent market growth, and you suddenly make $200 million more in the fifth year, but so what?”

Hiring

• Hire the best people you can find (even if more expensive), “I still think it’s more efficient …. if you have two really good people and a very powerful tool. That’s still better than having 20 mediocre people and inefficient tools.”
  
• Hire someone with passion/desire. From my own experience too - even if people are not good at something, when they want something badly they will go long way to achieve results.

Product

• Release early/often. It will save you a lot in the end.
• Follow your guts more than anything else. They have been exposed to all the things in your life, so they know. And your users’ guts too.
• Make research on user’s requested features. Sometimes they want one thing, and when you look closely they actually wanted something completely different but didn’t know how to explain it.

VC’s

• Learn to guess when VC’s cut you off, because they never say, “No”. It’s quite logical that they don’t want to cut their connections with you. If you do succeed they want to be with you. But not know. So let’s talk Monday about it again?
• VCs are strange birds. Here’s a quote from Currier’s interview:
  They all told me $18 million wasn’t interesting. And I’d say, “But most people will tell you $50 million, and you know they’re lying. I’m already discounting it because I’m a venture guy just like you are.” And they’d say, “Yeah, but $18 million just isn’t interesting.
  So I changed my spreadsheet to say $50 million. And they said, “OK, that’s pretty interesting.”

Help From other people

• Move to the right place. Ross again,
  One thing I didn’t know was how tightly connected everyone is in the Valley. We’ll meet someone, and then we’ll meet someone who I would never expect to even know that person, and they’ll say, “I heard you met Tony last week.”
  (Oh god, I have to do this one myself…)
• People will help you if you are pushing enough. Winblad, “I think this is something that people underestimate - that there are always people out there rooting for you.”

Tricks to get there

• Get it anyway you can - software, hardware, whatever does it. Meaning, don’t get bogged down by trying to do it one way or another. Switch, try, explore. Be flexible.
• Do it with leverage. Why do robbers use crowbars? You can do more with less. Find ways. Don’t build everything from ground up. There are free stuff you can use. Don’t create Google analytics. It’s there, use it.

Misc

• Do not kill yourself. Uhm, okay what I mean is what Winblad said, “But the majority of companies fail by self-inflicted wounds by the leadership team.”
• Setup your startup user registration to send you a text on the cell phone. Awesome idea I read in there…
• I like James Hong, so this section is just for his advices:
  • “One, do it while you are young”
  • “Two, there’s no right path”
  • “Three, even if you raise money, spend it as if it’s your own and you have none”
  • “Four, there so such thing as easy entrepreneurship”

I think it’s time to end, but this book is a fountain of precious experience. Also this is just my look at it. If there is one book you have get and read and think about, it’s this one, read it.

As my last semester advances I find myself involved in more and more group projects. 3 of my classes have long term group projects. In addition, I am a participant in the Merrill Lynch competition where 4 of us communicate on a daily basis and meet weekly. I am getting more and more frustrated with the task of finding time where all people can meet during the week. This back and forth email swapping and trying to match availability is a nightmare. Not that those people have no time they can meet, but if it takes 6 emails to figure it out, then there’s definitely an inefficiency to be corrected.

How difficult is to make a little site where people can post their free time. Co-workers will be able to check out each other’s free times, and see on the fly if all four anywhere. If not, you can easily see the whole chart and figure out where would be the most plausible place to do a little effort and squeeze a bit more time.

Burn Rate: How I Survived the Gold Rush Years on the Internet
by
Michael Wolff

ISBN-10: 0684856212

Though I knew generally what burn rate meant, I wasn’t aware of its implications. So I accepted this Amazon recommendation when I was researching for startup books. The book talks of how the owner of a media company is struggling to sell or position it strategically in the race of the upcoming internet (whatever internet meant back then). What this book really is - a book manual on business moves. Deals flying, promises exchanges, and crazy meetings. But interesting to see what really happens and that a startup is not just coding. Highlights:

• Naturally, the brightest figure from Burn Rate is the business guy that is trying to tie up random investors with companies on a variety of strategies. By the way, he makes it seems like business in itself is nothing like buying selling, but rather and art. The creativity Machinist comes with in terms of forming alliances, luring people into believing that the deal is going through are unimaginable. Basically - its what you make out of all the players, not what they are. You can move them. Just like a pieces of chess.
  • Author says it really nice, “It was true that when you reconstructed the specifics of conversations with Machinist, you often could not find the bridges by which we’d crossed these large chasms to great fortune”
  • Here is another example,
    “You know, your friend Machinist promised me, absolutely promised me, no doubt, no question, he’d have me out in a year, ” Rubin said, his pain apparent.. “You think I would ever have gone into this deal without that promise?”
    I nodded. “He made me the same promise. He swore he’d get rid of you in a year. I would never have done this if I thought I’d get stuck with you.”
    He bitterly laughed. “God, that Machinist is a fat fuck.”
• As Michael Wolff is trying to figure out what animal the Internet is, he made one of the most accurate 1-paragraph explanations and I love it, because I myself try to explain it somewhat like that:
  

  For Entrepreneurs (or unemployables) the Internet offered one of the most startling opportunities since - actually, has there been anything to match it? The cost of entry was minimal, the required knowledge base was so idiosyncratic that few could claim a meaningful head start, and there was little or no competition, regulation, or conventional wisdom. It was ground zero: no rules, no religion, no canon, no bullshit. It was startup time. If all else failed, you could still have the satisfaction of having been there; it was like Hollywood in the teens or Detroit in the twenties. A new American industry was being born.

Amazing.

• Another mystery seems to be accompanying the whole story, “Is internet a new medium?”
  - I believe no. A website is a medium. So Internet is more like a medium for other media. And no, nothing to match it…

My airport extreme died few days ago. I restarted it a billion times, restarted the cable modem too. I had the weirdest problem - one computer gets the real IP and all others get distributed ones that start with 10.0.1.x and they don’t work. After tweaks, changes in name, hard resets I figured out somebody plugged the cable in the local port instead of the WAN port.

In the process of trying to figure out what the heck was going on, I made desperate tries to search for the problem in Google. I found a billion problems, all different from mine. I had to read the full threads to see what is actually going on and to find out the guy forgot to plug the cable. I thought how useless all those forums are. The days of the forums for that purpose are gone. Now that wikipedia demonstrated the power of crowdsourcing for building an almost complete set of knowledge on a certain topic and well organized too, it is time to dare a little more and aim at gathering the full pack of information and not answering only random questions that pop up.

So here is another startup opportunity: If you could make site where people can build trees with branched problems, specified tests and complete solutions for a certain product, no one would ever go to forums anymore. Basically a well done flow chart but real life problems instead of variables and expressions. For example, you start from the beginning: Is it powered? The you check the lights, and either go to branches for fixing power either you go forward to next step. And at every level you are told specifically how to check what you don’t know and what it means. All of this of course has to be editable by the public. Getting all the possible problems for an airport express I am sure is actually much more achievable than it seems, considering how many millions of people there are that have knowledge on the topic.

It is basically a flowchart. I am sure a lot of companies use flow chart for problems, but I think time has come for this to become a standard practice for consumers to crowdsource all possible outcomes into one manageable application.As with all other ideas I have posted I believe there is huge potential, it is not difficult to make but I am just busy with other projects and just don’t have the resources to create it. If you do decide to do it, write out a message, I will give you extra hints, ideas, maybe help with other things. I definitely want to be a tester and can bring bunch of users too

I just don’t understand how our civilizations are thousands of years old and yet some things in our lives that are so obviously inescapable have so many flaws and opportunity for improvement. Slightly awkward and amusing but quite relevant is the topic of public restrooms. I am not a freak about cleanliness so I do use them but most of them are just so gross that even Shrek is no match for. Here are a few solutions I would love to see:

• How many generations does it take us to understand that men are sensitive about their attributes and even though you put urinals, half of men are always going to prefer to pee on the seating toilet just to get more privacy. The result of people urinating on the seat and people trying to take a shit on the same seat looks about like that:
  
  So instead, you couple one toilet with one urinal (you can see that empty space that we actually have) and you never get that pic again. Btw, that counts for a house with many boys like mine, because its much more easy to pee at a urinal than to aim at the toilet at 6.30 am…

• Oh yeah, don’t you love those transparent toilet papers that rip rather than unroll when you pull them? How can you wipe anything with it anyway? I have to fold it in 2^4. Same for paper towels at drying procedure.

• Flushing systems are just not right. Those handles (seen on pic above) that seem to need to be pulled to flush the toilets are just not having me. People pee on their hands and then what is the first thing they go for? Yeah, the flusher. Or the exit door (assuming that people that pee on their hands are the ones that don’t care washing them. If you can’t pay for sensors then please take a look at Italians’ way: they use pedals! How much more sense does it make?

• Please do not try to convince me that I have to touch anything so that I can wash my hands. Especially the idiotic push-buttons that are one for hot and one for cold water and you actually have to keep them press constantly so that water runs, consequently of which you just can’t possibly wash yourself qualitatively because hands never meet. Oh, and yeah the left one always gets burned while the right one gets cooled to freezing. I’ve seen people try to use their elbows its hilarious, believe me! Anyway. Sensors pls. Or even just regular handles would do fine. I promise, I will not waste a lot of water!
  [UPDATE: A friend of mine hinted that if you press strong enough you can get those push buttons stuck down so you can actually wash your hands. Which is exactly the opposite of saving water, since I do see them ‘broken’ all the time…]

• Blowdryers. Rarely dry completely and still most of them have to be pressed. Dyson so far is the only one that got it right! Or paper towels are fine. Just no crappy dryers that make me sweat more than they dry hands.
  

• Doors! What is the point of going through 15mins drying procedure when I still have to touch that door that is touched by every guy that wiped his ass and didn’t go through the drying procedure (or for that matter washing procedure). Hmm how about at least make doors pushable rather than pullable? How much does that take?

• We can’t change the mindset of a country but my school had a campaign by putting a paper above the toilets, “If you sprinkle when you tinkle, please take the time to wipe it off.” I did take time to do so when it was previously clear [only in that case]. It worked overally but as the papers got tore off, they didn’t get replaced. Cheap solution that works, because if previous person was created incentive to be clean (all of the above points) and leaves the place clean, it is much more likely for you to also clean up your stuff. Usually, generally, probably… but not always of course.

• Another problem girls seem to have - none of them actually sit on the toilet. From numerous discussions about it, it turns out lot of them just squat as low as they can without actually sitting on the toilet which is extremely difficult (I have tried it and I have failed). Still thinking about this one…

As you can see, most of those take a little thinking rather than money, and as a matter of fact they probably save money because of cutting spending on cleaners paychecks.

So if your about to build a facility with public restrooms, get in touch with me - I will consult for free.

(let me know if you have other suggestions)

Freakonomics
by
Steven D. Levitt & Stephen J. Dubner

ISBN-13: 978-0061234002

I bet that 90% of you have seen Freakonomics in one of the zillion bookstores around you. To be honest I was slightly disappointed since I didn’t find any firm, solid knowledge explaining today’s economics but rather a collection of random interesting economics-related facts. I did like some of them though so here we go:

• Crack dealers actually have extremely bad jobs - they make anywhere between $3.3 and $7 with a chance of getting killed of 1/4th! Why do they keep doing it? They play in a highly competitive field where the sweet life is only the top 1%, which is what everybody wants. Sounds familiar, doesn’t it?
• We often seem to oversimplify the situation. That causes us to be wrong, because the simplest explanations doesn’t get to the root of problems. When crime went down significantly in the 1990 (NY) people thought this is the result of random things - “gun control”, “clever police strategies”, and “better paying jobs”. However truth now discovered is quite unexpected: since most crimes were committed by teenagers and kids in their 20’s that were badly raised with no families and future, it was the Supreme Court’s legalization of abortion in 1973 that drastically reduced unwanted children so by 1990’s crime suddenly disappeared for unknown reasons. If you don’t step back to look at a huge picture, collect massive data, and analyze to the last detail you keep thinking that it was the “clever police strategies” that killed the crime in New York City.
• Authors make a good note on people’s incentives for… uh…anything. So basically if you want to motivate someone, you have to attack in all three areas:
  • Economic motivation…paycheck, duh!
  • Moral - you have to make someone believe that what they are doing is right and good for everybody. Painful example - Army.
  • Social - we want to be approved by other people so it is important that they accept our actions. Bring A’s from school and your parents are happy and you feel good about that.

  That being said now, we have to be careful not to create wrong incentives through others. Ex. In a daycare center, parents that are late picking up their kids started being charged $3. Surprisingly, after that surcharge was introduced many more parents started coming late. Why? Because the moral incentive has been replaced by the economic, but the economic wasn’t large enough to hold. So parents basically assumed that it is OKay to leave the kid longer and pay the money - “daycare center makes more”

• Somewhere around the book I saw a wonderful analysis of risk and people’s reactions to it. It looks like that:
  RISK = HAZARD + OUTRAGE
  (How dangerous) + (how much people are excited about it, and talk about it)
  OUTRAGE is significantly higher if risk occurs NOW - terrorist attack vs heart attack (more people die from heart attack, i don’t have to say it)
  OUTRAGE is significantly higher if we have NO CONTROL - plane accidents vs car accidents (as you might expect, chances of being in a car accident are many times higher than being in an airplane accident)
  So if the hazard is high and outrage is low - people under react
  But if the outrage is high and hazard is low, then people overreact
  So here is another fascinating example - rate of kids drowned in a residential pool is much higher than kids that shot themselves with guns. More specifically 11,000 to 1! So why are parents freaking out about guns and barely caring about their own swimming pools?

As a whole it was fun to read, but little helpful knowledge to be learned except this one lesson: Dig deep when you research, you’ll find amazing answers…