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How Will You Measure Your Life? Chapter 5 - The Ticking Clock

Amarillo, Texas

January 8, 2020

[My title for this chapter would be "No, That Approach To Sequencing Your Life Won't Work]

[I’m not sure how much of a summary I have created here. Christensen’s Chapter 5 is very powerful and hit very close to home for me. This chapter is so important because it addresses the fallacy of “I can postpone investing in relationships until {fill in the blank}.” Much of the section on how this applies to our personal lives is aimed at folks starting out in their careers and having young kids. However, I know Christensen’s counsel reminded me of mistakes I am still making - and that I will stop making!]

Few companies have launched their product with more fanfare than the Iridium Satellite Network—mobile phones that would allow people to call from literally anywhere on the planet by tapping into a complex celestial network of satellites.

Iridium was largely funded and managed by Motorola, one of the most highly regarded microelectronics and telecommunications companies in the world. Company executives and Wall Street analysts alike confidently projected that Iridium would revolutionize mobile communications, attracting millions of users.

The Iridium team had conducted extensive research to assess the market—and it was there.

The Iridium strategy would send each call from a customer to a satellite—which would then send the call back to earth, to the intended recipient. If the customer was on the other side of the earth, the satellite would send the signal to another satellite that was positioned to send the call to the recipient.

That meant that you could call someone from almost anywhere on earth. Iridium had access to world-class expertise and had overcome some seemingly insurmountable hurdles.

But there were some fundamental flaws in Iridium’s strategy.

Simply running through the exercise of “What assumptions need to prove true?” in order for the financial model of Iridium to work would have surfaced these issues. One of these was that customers needed to get comfortable carrying a handset in a briefcase, not a pocket or purse—because it weighed a pound. This was because it needed a big battery, to boost its signal to a satellite, not a local tower.


But after $6 billion in investment and less than a year starting service, the company was forced to admit defeat and declare bankruptcy.

Why did the executives of Motorola and its coinvestors fuel so much capital into such a risky venture?

The theory that we call “good money and bad money” offers an answer.

A Theory of Good and Bad Capital

At a basic level, there are two goals investors have when they put money into a company: growth and profitability. Neither is easy. 93 percent of all companies that ultimately become successful had to abandon their original strategy—because the original plan proved not to be viable.

In other words, successful companies don’t succeed because they have the right strategy at the beginning; but rather, because they have money left over after the original strategy fails, so that they can pivot and try another approach.

Most of those that fail, in contrast, spend all their money on their original strategy—which is usually wrong.

The theory of good money and bad money essentially is as simple as this assertion: When the winning strategy is not yet clear in the initial stages of a new business, good money from investors needs to be patient for growth but impatient for profit.

The theory demands that a new company figure out a viable strategy as fast as and with as little investment as possible—so that the entrepreneurs don’t spend a lot of money in pursuit of the wrong strategy. Given that 93 percent of companies that ended up being successful had to change their initial strategy, any capital that demands that the early company become very big, very fast, will almost always drive the business off a cliff instead. A big company will burn through money much faster, and a big organization is much harder to change than a small one. Motorola learned this lesson with Iridium. That is why capital that seeks growth before profits is bad capital. But the reason why both types of capital appear in the name of the theory is that once a viable strategy has been found, investors need to change what they seek—they should become impatient for growth and patient for profit.

Once a profitable and viable way forward has been discovered—success now depends on scaling out this model.

[Critics have argued that companies like Amazon and Facebook demonstrate that Christensen’s theory is wrong; as he would say, his theory is wrong because there are exceptions to it. Possibly, but I found the discussion above fascinating, particularly with regard to Iridium. BTW, for my walkabout, I acquired a satellite transmitter that for $20/month allows me to send 20 text messages from anywhere - but more importantly, will transmit my coordinates to 911 even when I am outside of cell service - it uses Iridium.]

I suggest the following discussion may be more supportive of the point he is trying to make with respect to our personal strategy.]

Planting Saplings When You Decide You Need Shade

Some of the most frequent offenders in failing to abide by this theory are big investors and successful existing businesses looking to invest in new growth businesses. The way in which this happens is through a predictable and simple three-step process.

The first step is that because the probability is so high that the initial plan isn’t viable, the investor needs to invest in the next wave of growth even while the original business is strong and growing—to give the new initiative the time to figure out a viable strategy. Despite this, the owner of the capital postpones the investment because today it seems unwarranted, given the strength of the core business and its incessant appetite for more capital investment and executive bandwidth. Deal with tomorrow tomorrow.

In the second step, tomorrow arrives. The original core business has become mature and stops growing. The owner of the capital suddenly realizes that he should have invested several years earlier in the next growth business, so that when the core business stalled, the next engine of growth and profit would already be taking over as the engine for growth and profit. Instead, the engine just isn’t there.

In the third step, the owner of the capital demands that any business that he invests in must become very big, very fast. For a venture that generates $40 million of business, to grow at a 25 percent annual rate you’ll need to find $ 0 million of new growth next year. But if a venture has grown to become a $40 billion business and wants to continue growing 25 percent next year, you’ll need to find $ 10billion in new business

The stakes—and pressure—become enormous. To accelerate it faster, shareholders pour lots of capital into these initiatives. But all too often, this abundant capital gives fuel to the entrepreneurs, allowing them to recklessly pursue the wrong strategy aggressively.

If a company has ignored investing in new businesses until it needs those new sources of revenue and profits, it’s already too late. It’s like planting saplings when you decide you need more shade. It’s just not possible for those trees to grow large enough to create shade overnight. It takes years of patient nurturing to have any chance of the trees growing tall enough to provide it.

Investing for Future Happiness

It can be all too easy to default to a bad money approach in our lives, too. Many of us thrive on the intensity of a demanding job—one that we believe in and enjoy. We like proving what we can do under pressure. Our projects, our clients, and our colleagues challenge us. We invest ourselves in our jobs. But in order to accomplish all this, we start to think of our jobs as requiring all our attention—and that’s exactly what we give them.

[If you were like me, my success in my job slowly but continuously crept into defining who I was - in the 1980s we called it the “Masters of the Universe.” Our jobs give us the most continuous source of positive feedback in our lives - it is natural to want more. Slowly but surely, we find ourselves spending more time working in search of that “positive feedback high.” That’s one place that my train went off the track and I began to lose sight of what was really important to me. If you let your job represent your self worth, you will lose whether your job is going well or going poorly.]

We call in to work from remote vacation spots. In fact, we may never take all the vacation days we’re allowed; there’s simply too much to be done. Work becomes how we identify ourselves. We take our smartphones with us everywhere, checking for news constantly—as if not being connected all the time would mean we’re going to miss out on something really important.

We expect the people who are closest to us to accept that our schedule is simply too demanding to make much time for them. After all, they want to see us succeed, too, right? We find ourselves forgetting to return e-mails and phone calls from our friends and our families; neglecting birthdays and other celebrations that used to be important to us.

Unfortunately, the same consequences that businesses face for failing to invest for the future apply to us, too. While most of us do have a deliberate strategy of creating deep, love-filled relationships with members of our family and our friends, in reality we invest in a strategy for our lives that we would never have aspired to: having shallow friendships with many but deep friendships with none; becoming divorced, and having children who feel alienated from us within our own home.

And we can’t turn the clock back

One of my neighbors, whom I’ll call Steve, told me years ago that he had always wanted to own and operate his own business. He had many opportunities to work for and learn from someone else in his profession—and at very attractive compensation, too—but he was never willing to part with his dream of being his own boss. That meant long hours at work, learning from relatively simple mistakes to build up his own firm. His friends and family were understanding, though; after all, Steve wasn’t doing it just because it was important to him.

He was doing it to provide for his family.

The meagerness of Steve’s investments of time in his family ultimately took its toll, however. Just as his company was finally taking off, his marriage fell apart. When he needed the support of siblings and friends as he navigated the pain of divorce, he found himself quite alone

He sought the returns on an investment he hadn’t made. [Note how this is similar to the Emotional Bank Account that Stephen Covey talks about] No one intentionally deserted him in his hour of need; it was just that he had neglected them for so long that they no longer felt close to him and they worried that any intervention might be considered an intrusion.

We all know people like Steve—and I think on some level many of us fear becoming that person.

[I promise I did not write this paragraph!!] There’s a reason that the film It’s a Wonderful Life has been so resonant for decades: what matters most in the darkest hours of George Bailey’s life are the many personal relationships he has invested in along the way. He recognizes, by the end of the film, that though he is poor, his life is rich in friendships. We all want to feel like George Bailey—but that simply isn’t possible if we haven’t done the work investing in those relationships with friends and family throughout our lives.

Each of us can point to one or two friendships we’ve unintentionally neglected when life got busy. You might be hoping that the bonds of your friendship are strong enough to endure such neglect, but that’s seldom the case. Even the most committed friends will attempt to stay the course for only so long before they choose to invest their own time, energy, and friendship somewhere else. If they do, the loss will be yours.

People in their later years in life so often lament that they didn’t keep in better touch with friends and relatives who once mattered profoundly to them. Life just seemed to get in the way. The consequences of letting that happen, however, can be enormous.

The Risk of Sequencing Life Investments

One of the most common versions of this mistake that high-potential young professionals make is believing that investments in life can be sequenced. The logic is, for example, “I can invest in my career during the early years when our children are small and parenting isn’t as critical. When our children are a bit older and begin to be interested in things that adults are interested in, then I can lift my foot off my career accelerator. That’s when I’ll focus on my family.”

Guess what. By that time the game is already over. An investment in a child needs to have been made long before then, to provide him with the tools he needs to survive life’s challenges—even earlier than you might realize.

There’s significant research that demonstrates just how important the earliest months of life are to the development of intellectual capacity.

Researchers studied the effects of how parents talk to a child during the first two and a half years of life. After meticulously observing and recording all of the interactions between parent and child, they noticed that on average, parents speak 1,500 words per hour to their infant children. “Talkative” (often college-educated) parents spoke 2,100 words to their child, on average.

By contrast, parents from less verbal (and often less-educated) backgrounds spoke only 600 per hour, on average. If you add that up over the first thirty months, the child of “talkative” parents heard an estimated 48 million words spoken, compared to the disadvantaged child, who heard only 13 million. The most important time for the children to hear the words, the research suggests, is the first year of life. The researchers followed the children they studied as they progressed through school. The number of words spoken to a child had a strong correlation between the number of words that they heard in their first thirty months and their performance on vocabulary and reading comprehension tests as they got older.

And it didn’t matter that just any words were spoken to a child—the way a parent spoke to a child had a significant effect. The researchers observed two different types of conversations between parents and infants. One type they dubbed “business language”—such as, “Time for a nap,” “Let’s go for a ride,” and “Finish your milk.” Such conversations were simple and direct, not rich and complex. Risley and Hart concluded that these types of conversations had limited effect on cognitive development. In contrast, when parents engaged in face-to-face conversation with the child—speaking in fully adult, sophisticated language as if the child could be part of a chatty, grown-up conversation—the impact on cognitive development was enormous.

These richer interactions they called “language dancing.” Language dancing is being chatty, thinking aloud, and commenting on what the child is doing and what the parent is doing or planning to do. “Do you want to wear the blue shirt or the red shirt today?” “Do you think it will rain today?” “Do you remember the time I put your bottle in the oven by mistake?” and so on. Language dancing involves talking to the child about “what if,” and “do you remember,” and “wouldn’t it be nice if”—questions that invite the child to think deeply about what is happening around him. And it has a profound effect long before a parent might actually expect a child to understand what is being asked.

In short, when a parent engages in extra talk, many, many more of the synaptic pathways in the child’s brain are exercised and refined. Synapses are the junctions in the brain where a signal is transmitted from one nerve cell to another. In simple terms, the more pathways that are created between synapses in the brain, the more efficiently connections are formed. This makes the subsequent patterns of thought easier and faster.

This matters. A child who has heard 48 million words in the first three years won’t just have 3.7 times as many well-lubricated connections in its brain as a child who has heard only 13 million words

The effect on brain cells is exponential. Each brain cell can be connected to hundreds of other cells by as many as ten thousand synapses. That means children who have been exposed to extra talk have an almost incalculable cognitive advantage. What’s more, research suggests that “language dancing” is the key to this cognitive advantage—not income, ethnicity, or parents’ education. “In other words some working-poor people talked a lot to their kids and their kids did really well. Some affluent business people talked very little to their kids and their kids did very poorly…. All the variation in outcomes was taken up by the amount of talking, in the family, to the babies before age three.

A child who enters school with a strong vocabulary and strong cognitive abilities is likely to do well in school early on and continues to do well in the longer term.

It’s mind-boggling to think that such a tiny investment has the potential for such enormous returns.

Yet many parents think they can start focusing on their child’s academic performance when they hit school. But by then, they’ve missed a huge window of opportunity to give their kid a leg up.

This is just one of the many ways in which investments in relationships with friends and family need to be made long, long before you’ll see any sign that they are paying off. If you defer investing your time and energy until you see that you need to, chances are it will already be too late.

As you are getting your career off the ground, you will be tempted to do exactly that: assume you can defer investing in your personal relationships. You cannot.

The only way to have those relationships bear fruit in your life is to invest long before you need them.

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