Archive for the ‘BOOK REVIEWS’ Category

Non-fiction Books Every 20-something Should Read

From Shane Parrish on Quora with an answer to “What are some great non-fiction books a 20-year old should add to his library?

Here’s 10.

1. Influence: The Psychology of Persuasion
Psychologist  Robert Cialdini introduces the universal principles of influence:  Reciprocation, scarcity, authority, commitment, liking, and consensus.  Sure you can watch the short video,  but it’s not the same. Buy the book. Why do you need to learn these? To  paraphrase Publius Syrus, “He can best avoid a snare who knows how to  set one.” After you read this book, move on to Poor Charlie’s Almanack.

2. Seeking Wisdom: From Darwin to Munger
The  last time I mentioned this book, Farnam Street readers flooded my  inbox. I’ll try to address the two primary concerns that appeared.  First, if you can’t find it new, just purchase a used copy. Who cares?  Second: Yes, it’s an “expensive” book. Ignorance is more expensive. Just  buy it.

3. Letters from a Stoic
I  came to Seneca a few years after I turned 30. It’s clear from reading  Seneca that he’s full of wisdom. His letters deal with everything we  deal with today: Success, failure, wealth, poverty, and grief. His  philosophy is practical. Not only will reading this book help equip you  for what comes in life, but it’ll also help you communicate with others.

4. The Moral Sayings of Publius Syrus
A  Syrian slave, Syrus is a full of timeless wisdom. Want an example?  “From the errors of others, a wise man corrects his own.” Here is  another: “It is not every question that deserves an answer.” Ok, one  more? “To do two things at once is to do neither.” And he didn’t even  know of Facebook and Twitter. You can read this book in under an hour  but spend the rest of your life trying to learn and apply his wisdom.

5. The Essays of Warren Buffett: Lessons for Corporate America, Third Edition
I’d much rather recommend Berkshire Hathaway Letters to Shareholders (alsofreely available), however, I recognize that most people would be intimidated by its size. In the Essays,  Lawrence Cunningham thematically organizes Buffett’s own words. There  is more than enough here to get a clear picture of the principles and  logic of Buffett and Munger’s philosophy for business, life, and  investing.

6. Cyrus the Great — The Arts of Leadership and War
Amazing. Cyrus was pretty awesome. His insights about leadership have “inspired great men from Julius Caesar to Benjamin Franklin to Lawrence of Arabia.” Peter Drucker called this book — Xenophon’s biography of Cryus — “the best book on leadership.” You’ll learn about Cyrus’ various campaigns as he conquers Babylon. While the story is old, the leadership lessons are as relevant today as they were then. Among other things “Xenophon shows you how to conduct meetings, become an expert negotiator, deal efficiently with allies, communicate by appealing to the self-interest of your followers, encourage the highest standards of performance, ensure your organization has the benefit of specialists, and prove that your words will be backed by your deeds.”

7. Letters From a Self-Made Merchant to his Son
This book has been on my shelf for over a year. I have no idea why. While the letters are over a hundred years old, they are full of timeless wisdom and practical no-nonsense advice to parents and wisdom seekers alike. Something I’m sure to re-read over the years.

8. The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers
This is the best business book I’ve read in a long time. Perhaps one of the best ever. Ben Horowitz has been to hell and back and he’s got the scars to prove it. He’s built billion dollar companies, mentored CEOs, been within weeks of bankruptcy, worked with some of the smartest people in the world, and started a tech company in the middle of the dot com crash. Through it all he’s found there are no easy answers. After reading it, I immediately bought several copies and shipped them to friends of mine.

9. The Drunkard’s Walk: How Randomness Rules Our Lives
A great book for me to read so soon after finishing Fooled By Randomness as they both approach the same subject from vastly different angles. Mlodinow’s book is a gentler, though not necessarily better, introduction than Taleb’s. After walking through some elementary lessons in statistics that even professionals get wrong, the book explores how our lives are more informed by chance and randomness than we think. Along the way he offers some tools to help us make better decisions.

10. Zen in the Art of Archery
The author, Eugen Herrigel, spent time in Japan after World War II and wanted to better understand Zen Buddhism. This is impossible to understand through books and requires an activity. He picked archery and found a Zen master who reluctantly accepted him as a student.  Herrigel, being a Westerner, sought rapid progress and linear improvement through technical mastery. This wasn’t enough and became self-defeating. To truly master an art it has to become an “artless art” where it grows out of unconsciousness. Thus archery became a path to greater understanding.

Of course, I’d also add The Prince and the Origin of Species; Two books people talk about all the time, yet few have read.

If you like reading you can see with What I’m Reading.


Book Review: How To Give Half Of Your Work Away For Free

December 16, 2013 Leave a comment

“We are all given a short time, and I think the biggest mistake a lot of entrepreneurs make is that they design and optimize their vision to provide the largest financial return possible. Now, making money is not a bad thing, but what should be known and understood, is that in the end, our salaries, the cars we drive, the square footage of our homes… none of that matters. What matters is the legacy that our business and our vision can leave behind – a legacy that has the ability to shape, disrupt, or destroy, a familiar system. When you disrupt a familiar system, you change perspective – you change the way a community can define themselves to inspire future innovation. Just because things are the way they are does not mean they should remain that way. I want to invite you all to leave your mark on something, and don’t be afraid of ignoring what you are brought up thinking is natural. – Matthew Manos @ TEDx, 2012

From Henry Ford’s assembly line to TOMS Shoes‘ highly publicized “one for one concept,” organizations are continuing to experiment with new ways of doing business. Los Angeles-based verynice, a global design, business and innovation consultancy that dedicates over 50% of its efforts to pro-bono services, is another example of a company who has been successful by applying an untraditional business model.

First, some key stats and figures provided by verynice founder Matthew Manos:

  • There are 27.5 million small businesses which make up 99.9% of all businesses in the United States
  • There are approximately 1 million non-profit corporations in the U.S.
  • Non-profits spend $8 billion annually on marketing and design expenditures, generated primarily by a handful of large non-profits (which means most non-profits are operating on razor-thin budgets)

“How To Give Half Of Your Work Away For Free” was written as a toolkit to open-source verynice’s business model. The core component is a “double-half” methodology where you double your workload and give half away for free through a pool of remote workers.

By bringing on teams on a per project basis as opposed to building a dedicated, permanent staff, monthly fixed costs are brought to a minimum which makes giving work away for free an affordable, if not overhead-less endeavor. While paid projects employ paid contractors, unpaid/pro-bono projects pull from the same pool of contractors, but invite them to participate in the project on a volunteer basis.”

This post isn’t meant to cover the nuts and bolts of verynice’s business model, but here are some of the key elements that highlight their unique POV.

Why The verynice Business Model Exists To Help Non-Profits

While expenditures for services like marketing and design grow each year, funding declines…When a non-profit is able to save valuable financial resources thanks to the generous pro-bono commitments of service-providers, they are able to immediately reinvest those dollars into their cause.”

Why 50%?

I define an extracurricular activity as something we spend less than half of our efforts doing. If we want to get serious about making an impact, it is my sincere belief that we need to start making giving back an integral component of business, something that gets a lot of focus, not something we do on the side.”

Leveraging Skills-Based Volunteering

This model thrives off of the philosophy that remote working relationships are the future of business, and that we only go to an office because there is one.” (For more on the remote work movement, read Remote: Office Not Required by 37Signals).

Why Social Entrepreneurship Is A Viable Alternative To The Current Non-profit Model

Seeking donations, grant writing, etc., as business strategies, limits an organization’s ability to give by drawing their focus away from the actual cause at hand. Social entrepreneurship, on the other hand, is a new medium for approaching the same causes that any non-profit organization might approach.

The difference between the two models: Social entrepreneurship allows an entity to be self-sufficient and independent through the development of various for-profit components that are integrated with the organization’s outreach. This kind of model not only allows the company to do well by doing good, but it also allows for an efficient focus on the end goal, which is to solve a problem, as opposed to constantly seek help.”

I found “How To Give Half…” truly inspiring. This is the best kind of book – the kind that makes you think differently and know that change is possible. It’s a fresh perspective on business that shows how a company can be profitable AND make a significant social impact without compromising profits or ideals.

I highly recommend this book, especially if you’re a service-oriented business (doctor, lawyer, hairstylist, designer, etc.) looking for a blueprint on how you can be profitable while making a tangible difference in the social sector.

Full Disclosure: I was given an advanced copy of How To Give Half of Your Work Away For Free, but it did not influence my review. 


Visit to learn more about verynice and get a free copy of their ebook

Here Comes Everybody: The Power of Organizing Without Organizations

January 20, 2013 1 comment

One Sentence Summary

Here Comes Everybody‘  is about the impact new technologies ( internet, mobile, etc.) have on group dynamics.

What Is The Main Argument?

Shirky’s main argument is that social tools have made it easier for groups to share, cooperate and act together without the hindrances of traditional organizational structures.


Key Themes + Lessons (summary)

  1. Groups can be formed more easily today than in the past
  2. New social tools allow for mass amateurization
  3. Group activity is a product of the 80/20 rule
  4. Average participation is NOT representative of the group
  5. Real-time coordination can replace planning
  6. Social capital is the invisible glue that makes societies stick
  7. Groups are held together and guided by ‘connectors
  8. Low barriers mean higher rates of both success and failure
  9. Group activities always have the elements of a Promise, Tool and Bargain

Key Themes + Lessons (detailed)

1. Groups can be formed more easily today than in the past. Why? Every organization has  to expend their limited resources of time, attention and money to remain viable. These ‘transaction costs’ are a necessary part of doing business, however, the endless meetings, paperwork and similar activities prohibit any organization from pursuing its mission 100%. Apple might be focused on creating the world’s best tech products, but at the same time it needs to spend a considerable amount of time, attention and money managing the Apple business.

Social tools (internet, mobile, IM, social media, etc.) have reduced these transaction costs dramatically. is an example of a non-traditional organization that uses social tools to allow people to come together in groups much more easily than before, from the common (Stay At Home Moms) to the niche (Wiccans).

One way to look at groups are as a ladder of activities that are enabled by social tools. As you move up the ladder, the level of difficulty in getting the group to do anything increases. Sharing is the least demanding rung. Cooperation is more difficult because it involves changing behavior to sync with people who are changing their own behavior to match up with yours. Collective action means everyone in the group commits to work together and achieve a particular task.

For example, sharing a Facebook post about the Lance Armstrong doping scandal is easy, while getting a million people to sign a petition to ban performance enhancing drugs is very difficult.



2. New social tools allow for mass amateurization. Today, anyone can create, publish and filter content. Professionals have traditionally acted as gatekeepers (Ex: news organizations like CNN), however, new social tools (like blogging) are letting non-professionals find like-minded people and publish their own content with ease.

This change isn’t from one kind of news institution to another (like spectators replacing seasoned journalists), but rather in the way we define news. Nowadays, we’re no longer dependent on formal organizations to tell us what’s happening in the world. Instead, they’re part of a larger pie of news sources that include informal collectives (like a small team of bloggers) and individuals (like people who share breaking news on Twitter).


The distinction between communications and broadcast media was always a function of technology rather than a deep truth about human nature.”


Historically, the different forms of media have acted as filters of information. Talking on the phone used to be one of the main forms of communications because technologically, it was what was available, not because it was a natural way for us to talk to someone. Over time, the way we communicate has evolved from a one-to-one to one-to-many to many-to-many pattern.


Traditionally, media was created by a small group of professionals, then delivered to a large group of consumers, in the form of a funnel where the few provided information to the many. Today, people aren’t just consumers. They’re also producers and sharers, so when marketers talk about ‘Consumers,’ they’re really just referring to a temporary behavior, not a permanent identity.



3. Group activity is a product of the 80/20 rule, where the majority of effort and output comes from a smaller, more active group. The image below is an example of a Power Law Distribution, which illustrates the imbalance of participation across various forms of group activity, including social media. For example:

  • A small percentage of the world’s blogs account for the bulk of blog traffic
  • Most of the photos on Flickr or Facebook come from a small number of highly active users
  • Political revolutions (like the recent uprising in Egypt) are fueled by a highly active minority, etc.



4. This imbalance is critical for another reason: average participation is not representative of the group because power law distributions tend to describe systems of INTERACTING elements, rather than just collections of VARIABLE elements.

  • The most active participants are so much more active than the median participants that any measure of “average” participation becomes meaningless. A representative contributor simply DOES NOT EXIST, so you have to focus on the behavior of the collective instead of the individual users
  • Surprisingly, most participants are below average
  • As networks get bigger, the imbalance between the few and the many gets even larger (not smaller)

To me, this seems like a common marketers make when they’re creating consumer profiles (personas). Sarah is 25-44 years, makes 25-75K a year, is very optimistic about her future, etc. etc. Sound familiar?

The problem is we’re assuming ‘Sarah’ represents all her peers – she doesn’t. No one does. Instead of focusing on her, the individual user, we need to focus on the “behavior of the collective.” So 1) we need to isolate the most active participants, and 2) we need to analyze how the group acts as a whole.

“Conspiracies are punished separately from single-offender criminal acts, and often as severely even if the conspiracy fails to achieve its aim, because a group having some illegal purpose is more dangerous than an individual who has the same purpose.” — Judge Richard Posner


5. Collective action is harder to start than individual action (because of the difficulty in coordinating individuals and their interactions), but also harder to stop once it gets going because potential users will be more skeptical that enough users will join to make it worth their while. The increasing speed of new social tools mean groups can form and act faster than before. 

The key takeaway is that the ubiquity of communication methods means real-time coordination can replace planning. During Hurricane Sandy the affected residents didn’t need to wait for the government to organize a response. Instead, within hours and days people were able to coordinate and help each other, distributing much needed supplies through social tools.

6. ‘Social capital’ is the invisible glue that makes societies stick: people trust and help each other, exchanging favors without expecting anything in return. Basically, it’s a belief in good karma.

Over time, social capital started decreasing in the U.S., especially in the 2nd half of the 20th century. Bowling leagues and ice cream socials have become nostalgic memories of how America used to be. One cause for this decline was an increase in the difficulty of getting people together due to:

  • smaller households
  • delayed marriage
  • two-worker families
  • spread of television
  • suburbanization (which created a shift in social capital activities, moving them from the neighborhood to the workplace)

It’s important to understand that behaviorally, most people like being around other people, which is why communications tools like email and Skype haven’t replaced travel.


The role of the internet is to augment social life —

NOT provide an alternative to it.


The thing to remember is that people don’t use social tools just for the sake of using social tools. They use them for much desired social capital, like building and maintaining relationships.

7. Groups are held together and guided by ‘connectors.’ As an example of the 80/20 rule, social networks are held together by the few, NOT the many. Malcolm Gladwell calls these people connectors. Think of the social butterflies among your group of friends. Those people who have a ridiculous number of friends on Facebook or followers on Twitter. They’re online influencers who command attention.

Researchers Duncan Watts and Steve Strogatz explain how networks are held together through a pattern they call the “Small World network.” The two main characteristics are that:

  • Small groups are DENSELY connected
  • Large groups are SPARSELY connected

The first image illustrates a sample network progression. It quickly becomes complex, sparsely connected and very difficult to scale. In a small group, it’s not that difficult for 5 people to know and interact with each other, but as the group grows much larger, 15 people interacting each other is increasingly unsustainable, especially over a long period of time.

The second image illustrates a network of dense clusters where they are held together by the “connectors” in the group, so everyone isn’t interacting with everyone else. Instead, the groups are held together a few highly active individuals in behalf of everyone else in their respective groups.

network of dense clusters - clay shirky

Shirky suggests adopting both dense and sparse connections strategies at different scales: “You let the small groups connect tightly, and then you connect the groups. But you can’t really connect groups – you connect people within groups.”


“More people will remember you saying yes to a failure than saying no to a radical, but promising idea.”  — Clay Shirky


8. Low barriers mean higher rates of success and failure. People will participate despite high failure rates if the barriers (transaction costs) are low enough (Ex: 4chan, crowdsourcing, Instagram, Kickstarter, Pepsi Refresh Project, Wikipedia, etc.). As Jinal Shah wrote in a recent Fast Company article (emphasis mine),

“Also important are the mechanisms allotted for encouraging users to send their invitations. Notifications, email newsletters, and social sharing aren’t just a consideration anymore–these are the absolute must-haves alongside simple, one-step sign-upsSkillshare, a community marketplace for online learning, allows users to explore the site’s offerings and only requires sign-up if and when you want to follow or enroll in a class. Is your marketing campaign easy to engage with? Because it should be.”

From an organizational perspective, most companies try to reduce the effect of failure by reducing its likelihood. They will hire a “steady performer” over “brilliant, but erratic” because the latter is seen as too risky and less prolific. But who knows? You might be turning away the next big game-changing idea. See “50 Famously Successful People Who Failed At First.”

Clients and agencies love to talk about innovation, even though for the vast majority, it simply isn’t in their DNA. It is the acceptance of failure that allows open source models (like Wikipedia and Linux), social change platforms (Ex: and a distributed process like crowdsourcing to find success – they’re not tied up by the same prohibitive transaction costs (like time sheets, office politics and unproductive meetings).

9. Group activity can be seen through the lens of a Promise, a Tool and a Bargain. These should be thought of as basic elements and not a recipe for success.



The promise needs to convince individuals that it will offer value, but also that others will find value. In other words, you’re not going to join a book club or a running club to be the only member. You join largely because you think a lot of other people will do it too (remember, people crave the company of other people). It’s the same reason you want to go to the busy restaurant with an hour wait – we just naturally want to be around other people.

“Any new claim on someone’s time must obviously offer some value, but most important, it must offer some value HIGHER than something else she already does, or she won’t free up the time.” — Clay Shirky


There isn’t a one-size-fits-all tool. They’re dependent on context and what you’re trying to accomplish, but they must also help people do something they actually WANT to do (“If you designed a better shovel, people would not rush out to dig more ditches” — Clay Shirky). Social tools don’t create groups – they simply remove the obstacles to group formation (like every time Facebook makes a change to their service and people go crazy).

Instead, the focus should be on the kinds of tools the groups are expected to support, NOT the individual tools themselves. Two of the most important questions to ask are:

  • Does the group need to be small or large? (remember that size is relative)
  • Does it need to be short-lived or long-lived? 

For example, it can be argued that a small, but passionate group of fans were the reason that a cult hit like Arrested Development (which ended in 2006) is coming back on Netflix with new episodes, and possibly, a movie (small group, long-lived), while a large group of people unhappy with the new Instagram TOS have caused the service to lose half of its active users in less than two months, from 40 million to 17 million users (large group, short-lived).


The bargain is the last piece of the puzzle. It only matters if the Promise and the Tool have been satisfied. The most important element of the Bargain is that the users have to agree to it. It can’t be forced on people (like the Instagram TOS, the relaunch of Delicious where everyone’s bookmarks disappeared or Flickr’s attempts to force people to merge their accounts with a Yahoo log-in).






If you’re interested in learning more about group dynamics, ‘Here Comes Everybody‘ will be a great addition to your personal library. It’s full of great insights that I think are especially applicable to digital marketers, although at 321 pages I think it could have been maybe 50 pages shorter.

Book Summary: “Influence: The Psychology of Persuasion”

July 21, 2012 1 comment

DISCLOSURE: This post was originally published July 19th. See the original + follow up comments on the Casanova Pendrill blog.

Every discussion about top marketing books should include this classic by Dr. Robert B. Cialdini. “Influence” explains the psychology of why people say yes and how to apply these findings to others and your own life.

If you’re interested in the fields of behavioral economics, evolutionary psychology and game theory, you’ll probably like “Influence” too.

Here are the 6 main principles explored in this book:

  1. Reciprocation
  2. Commitment & Consistency
  3. Social Proof
  4. Authority
  5. Liking
  6. Scarcity


This rule states that “…we should try to repay, in kind, what another person has provided us.”


  • If someone buys you lunch, you feel obligated to buy them lunch next time (I owe youMichelle!!)
  • At the supermarket, or a warehouse club like Costco, “free” samples encourage the reciprocity rule when they make you buy something you wouldn’t have otherwise.
  • For the ladies, if a guy takes you out to an expensive dinner, you feel obligated to go out with him again even though you weren’t that into him.


This principle is about our “…desire to be (and to appear) consistent with what we have already done. Once we have made a choice or taken a stand, we will encounter personal and interpersonal pressures to behave consistently with that commitment. Those pressures will cause us to respond in ways that justify our earlier decision.”

Some examples:

  • Maintaining your religious affiliation, even though there isn’t a shred of evidence that confirms what you believe is in any way true (especially if your name is Tom Cruise).
  • You stay married, even though divorce may be the best option, because you’ve made a public commitment “til death do us part” (and your name is Katie Holmes).

  • You’ve made it public knowledge that you believe President Obama was born in Kenya and continue to bring up the issue, even though there is substantial evidence indicating he was in fact born in Hawaii (and your name is Donald Trump).
  • You tell everyone you’re running your 1st marathon in 3 months. The public announcement, or what I call “forced accountability,” will motivate you to be more consistent in your training so you hit your goal.


Social proof is what a lot of us would refer to as peer pressure, but I think it’s closer to herd behavior. This rule “…applies especially to the way we decide what constitutes correct behavior. We view a behavior as more correct in a given situation to the degree that we see others performing it.” Basically, everyone else is doing it, so I’ll do it too.

For example:

  • You’re at a bar and your 4 friends order margaritas, so you do the same.
  • You start wearing your jeans really low because all your friends are doing it.
  • You laugh at a joke because your friends are laughing, but you don’t even get it.
  • You see everyone else staring up at the sky, so you look up too (works every time).


Very simply, this just means we prefer to say yes to the requests of people we know and like.

But what are the factors that cause one person to like another person?

A) Physical Attractiveness

Want to know why Kim Kardashian has almost 10 Million ( ) ‘likes’ on Facebook, her own reality show and a clothing line at Sears?? Sorry, it’s not because she’s super smart or talented — it’s mostly because she’s super hot and dresses really well. And since she’s super hot and dresses really well, people like her and want to be associated with her.

B) Similarity

We like people who are similar to us, whether it’s sharing opinions, personality traits, background, lifestyle, etc.

  • A good example are the cliques that form in high school: athletes, nerds, band geeks, etc. – everyone found a group they associated with the most. And if you were a total social outcast, you probably associated with other outcasts.
  • We see the same dynamic within agencies: Planners hang out with Planners, Creatives hang out with Creatives, and so on.
  • This is also one reason why couples tend to look like one another (Will Smith and Jada Pinkett-Smith, Tom Cruise and Katie Holmes, etc.).

C) Compliments

We generally love getting compliments, even if they’re not true. Of course, YOU wouldn’t fall for it. I mean, you’re incredibly smart and fun to be around. Did I mention the fact that you’re insanely good-looking? Yes, YOU!!

D) Contact

We like things that are familiar to us. On the other hand, we often fear what we don’t know.

Some examples:

  • Contact is one reason Pavel eats at the same restaurants over and over and over again (and why I make fun of him), instead of trying a new place.
  • Contact is also why African-American voters overwhelmingly voted for Obama in the last presidential election and why presidential candidates are most likely to win in their home states. Because they’re familiar and “closer to home.”
  • It’s also why I’m going a little crazy as I type this post on a PC after using a Mac for almost 2 years. I’m used to my old computer.
  • You find out the new girl at work was in the same sorority. And loves Adele! And Glee!! And cupcakes!! Guess what? You just became BFFs!!

E) Cooperation works a little differently. We also like people who work with us, instead of against us. Working together towards a common goal and being “on the same side” are very powerful.


  • It helps us understand why “Yes We Can” worked so well as a unifying slogan for the 2008 Obama campaign.
  • You work together on a new business pitch
  • Sports teams
  • We see this all the time in reality shows, like the tribes or alliances formed in “Survivor” or the “Real Word/Road Rules Challenge.” On a smaller scale, we see it in “The Real Housewives of Orange County” and “Jersey Shore” when Gretchen pairs up with Tamra or Jwoww pairs up with Snooki and Deena, respectively. Not that I watch those shows :)

F) Conditioning & Association

“All things being equal, you root for your own sex, your own culture, your own locality…and what you want to prove is that YOU are better than the other person. Whomever you root for represents YOU; and when he wins, YOU win.” – Isaac Asimov

The principle of Association “…is a general one, governing both negative and positive connections. An innocent association with either bad things or good things will influence how people feel about us.”

Everyone wants to be part of a winning team because it raises your social standing. People will therefore try to link themselves to positive events and distance themselves from negative events.


  • Ever notice how people says “WE won!!” when their team wins, but they say “THEY lost!!” when their team loses??

  • Of course, it’s the same idea with brands: Starbucks, Apple, Coach, etc. We buy these brands largely because of the Association rule.

  • The same rule applies to name droppers, who want you to know who they know (did I mention my neighbors in high school were Das EFX? I didn’t? Oh, ok. No big deal.).


Very simply, people tend to follow authority figures. We are taught from a very young age that obedience to authority is right and disobedience is wrong.


  • Policemen, firemen, clergy, office managers, etc.
  • Titles (PhD, Esq, MBA, etc.)
  • The way people are dressed (Ex: 3-piece suit vs. tank top and board shorts). Con artists exploit this rule all the time, like Leonardo DiCaprio in “Catch Me If You Can.”
  • In Advertising, we see this principle at play in celebrity endorsements.


The scarcity principle states that “…opportunities seem more valuable to us when their availability is limited.” Fans of behavioral economists may see how this ties into the concept ofLoss Aversion – the fear of loss is always greater than the desire for gain.


  • Limited time offers – A certain product is in short supply that cannot be guaranteed to last long (like Missoni at Target several months ago or Tickle Me Elmo several years ago).
  • Deadlines – An official time limit is placed on the customer’s opportunity to get the offer. Black Friday and Cyber Monday are great examples.
  • Another variant of the deadline tactic is when you’re told that you have to buy NOW or the price will go up very soon (Ex: health club memberships, buying a car, etc.).

Why does the Scarcity principle work so effectively?

“…we know that the things that are difficult to possess are typically better than those that are easy to possess, we can often use an item’s availability to help us quickly and correctly decide on its quality.” Rather than weighing all the pros and cons, we use scarcity as a mental shortcut to make decisions.

  • Scarcity is why you get more interested in someone when they don’t return your calls, emails or texts. The other person is “making themselves scarce.”
  • Scarcity is also one of the main drivers with collectibles (like baseball cards, artwork, coins) and rare items, like caviar. People don’t eat caviar because it’s particularly good. They eat it because it’s expensive and it’s expensive because it’s rare (scarce).
  • Luxury brands like Louis Vuitton and Burberry are having a much more difficult time justifying their high prices. These brands used to be exclusive – only the wealthy could afford them, but with the rise of outlet stores and cheap knock-offs, now anyone can get their hands on a tartan plaid Burberry scarf and the scarcity advantage disappears with it.


This post is only an overview meant to highlight the main principles of influence with real-world examples.

If you want to understand more of the science and psychology behind our choices, I highly recommend you check out “Influence: The Psychology of Persuasion.”

What do YOU think are the best books for marketers trying to understand the human mind? Add them in the comments!!


November 24, 2011 Leave a comment

As I look back on all the books I intended to read in 2011 and didn’t, it feels very frustrating that I didn’t make more progress. Enter DailyLit, a site I had heard of a while back, but didn’t take seriously.

The basic idea is very simple: you subscribe to a book either by email or RSS and it’s sent to you as installments. You can set it up to deliver daily, every other day, etc. And it’s free.

I don’t think it works well for Fiction since Fiction has a flow and momentum you lose if read too sporadically, but I think it might work well for Non-Fiction.

I’ve decided to test it out with The 50th Law, by 50 Cent and Robert Greene (before you laugh, Greene in an incredible researcher and writer and the reviews are excellent), which is broken up into 85 installments, so I’ll finish the book in less than 3 months (at my current setting of one installment per day).

DailyLit isn’t going to be my only source for Literature – I’ll keep reading books the traditional way, but I think it could be a nice supplement to encourage myself to read more.

Book Review: Liar’s Poker

February 5, 2011 Leave a comment

I was already impressed with Michael Lewis after reading “Moneyball,” but “Liar’s Poker” is even better. Lewis is a masterful storyteller, and this book provides an excellent first-hand account of what it was like to be an Investment Banker on Wall Street in the 1970s and ’80s while taking us behind the scenes of the events leading up to Black Monday.

I. Some choice quotes

“I have this theory,” says Andy Stone, seated in his office at Prudential-Bache securities. “Wall Street makes its best producers into managers. The reward for being a good producer is to be made a manager. The best producers are cutthroat, competitive, and often neurotic and paranoid. You turn those people into managers, and they go after each other. They no longer have the outlet for their instincts that producing gave them. They usually aren’t well-suited to be managers. Half of them get thrown out because they are bad. Another quarter get muscled out because of politics. The guys left behind are just the most ruthless of the bunch. That’s why there are cycles on Wall Street — why Salomon Brothers is getting crunched now — because the ruthless people are bad for the business but can only be washed out by proven failure.” — pg.141

“No one ever cried on the trading floor. No one ever showed weakness or vulnerability or need for human kindness. Early on Alexander taught me the importance of a strong exterior. “I learned a while ago that there was no point to showing weakness,” he said. “When you arrive at six-thirty A.M., having had no sleep the night before, and having lost your best friend in a car accident and some Big Swinging Dick walks over to your desk, slaps you on the back, and says, ‘How the hell are you?’ you don’t say, ‘I’m really tired and really upset.’ You say, ‘I’m great, how the hell are you?’ ” pg.237

II. Key Takeaways

This book reminded me that when reading non-fiction, you don’t need to spend too much time focusing on the finer details. There are many parts of “Liar’s Poker” that get into the minutiae of economics and finance. Some of it I understood, while other parts were over my head.

That’s OK.

The most important thing, to me, is understanding the key themes and points. How did these people think? What were their motivations? How did their involvement in Wall Street during this time period foreshadow the recent economic turmoil in the U.S. and worldwide?

“Liar’s Poker” is about a lot of things: greed, ego, money, corruption, extravagance, management, opportunism, etc. These themes overlap throughout the book. As I read, I couldn’t help but think of the many ways it paralleled my experience in the mortgage industry just a few years ago.

Men in general judge more by the sense of sight than by the sense of touch, because everyone can see but only a few can test by feeling. Everyone sees what you seem to be, few know what you really are; and those few do not dare take a stand against the general opinion.” — Niccolo Machiavelli, The Prince

III. Should You Read It?

Absolutely. Liar’s Poker is excellent: Lewis is an incredible writer and it will help you understand 1) what goes on behind closed doors on Wall Street and 2) how the U.S. got into it’s current economic mess.

Buy it on Liar’s Poker

Categories: BOOK REVIEWS

Book Review: Leaving Microsoft to Change the World

December 5, 2010 Leave a comment

Leaving Microsoft To Change the World” by John Wood, founder of Room To Read, is easily the most inspirational book I’ve read all year. I found it fast-paced and very readable. It’s the story of a Microsoft employee who decides to leave his position as a technology executive to help under-resourced Third World children gain access to education through libraries, schools and books.

I’m going to share a passage about the madrassa schools in Afghanistan (these schools are also present in neighboring countries like Pakistan). I never heard about this story until I read this book. It’s a strong argument for supporting education, especially abroad:

Afghanistan has been invaded by the Soviet Union in 1979. The United States, fearful of a further expansion of Soviet influence, provided weapons and large amounts of cash to the Afghan resistance fighters. After tens of thousands of deaths and years of warfare, the Soviets realized that they were not going to win control of this fiercely independent country. It marked the end of eight decades of Soviet expansion, and the beginning of the implosion of an empire that had reached to far and stretched itself to thin.

The United States watched the withdrawal and decided that with the Soviets vanquished, America’s job was done. The U.S. could pull out immediately and leave the Afghani people, amongst the poorest in the world, to live amongst their piles of bombed rubble. The American government did not so much as buy them some brooms to help start the cleaning.

This was such a major strategic error on the part of our government. Because guess what came next? There was the need to rebuild the destroyed buildings, including the hospitals and the schools. The Soviets has been merciless in their attempts to intimidate the Afghani people by bombing them back to the Stone Age. The U.S. did not stick around long enough to help in the rebuilding, because our reason for there was not pro-Afghani, but rather Anti-Soviet. So the Afghan government needed help in rebuilding, and the Iranians and the Saudis were only to eager to help.

Both countries, neighbors to Afghanistan, wanted to fill the vacuum that had been left by the departure of the two superpowers. They each made a big commitment to constructing schools. The only problem is that these were not secular schools. They were madrassas, or religious schools, that taught a very hate-filled version of Islam (NOTE: not every madrassa has a political, religious or radical affiliation). The Saudi schools taught their own anti-Western Wahhabi version, while the Iranians built schools that taught their students to curse ‘the Great Satan’ of America. The only difference between the Saudi schools and the Iranian ones was the degree of anti-Westernism in their curriculum.

The CIA estimates that between them, the governments of Iran and Saudi Arabia sponsored the opening of over ten thousand madrassas in Afghanistan. And you know the rest of the story, because we’ve been living it for the last two weeks. A large percentage of the terrorists at large today were trained in these schools. Can you imagine how different the world would look today if those students had been more focused on one-two-threes and ABCs instead of being taught to chant ‘Death to America?’ We lost our opportunity to rebuild those schools, and we will be paying the price for decades to come.”

I’ve spent a number of years looking for a cause I can support. Take one look at and the options are both limitless and overwhelming.  “Leaving Microsoft…” has made the choice much easier.

The challenge many would-be donors face is knowing where their money is going. One of the main things that makes Room to Read stand out is that they do a good job of being transparent and providing tangible results: X dollars builds Y schools/libraries, etc. I encourage everyone to visit the Room To Read website (and read the book) to get involved and learn more about this great organization.

BUY IT ON AMAZON Leaving Microsoft to Change the World: An Entrepreneur’s Odyssey to Educate the World’s Children

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