A lot of people may agree with this idea, but they take the view that in order to achieve it, we should quit our jobs, leave behind our possessions, abandon our modern lifestyles, and live ‘simple’, ‘primitive’ lives off the land and in nature, with the rationale that this would be the only way to achieve such an ideal.

I disagree. With a primitive lifestyle we may very well be free, but free to do what?

Modern society may have burdened us with many things, but there are many more things we can now do. In a primitive society, you may have been free to:

• Make music with simple instruments.
• Build shacks and huts with wood.
• Make fresh meals with available foods.

But in modern society we’re free to:

• Make music with sophisticated instruments, record it in our own homes, share it globally online.
• Architect and build skyscrapers and other immense and beautiful structures with a variety of materials for a variety of purposes.
• Make complex, convenient and varied food with unlimited ingredients in any season.

In addition to, not at the exclusion of, the above.

So in a primitive society we can be free, but within a much more confined context. In a modern society we have an expanded capacity to be free.

So what is it about a modern society that has granted us this expanded capacity of freedom?

Two main things:

1. Technological growth (I use that as an umbrella term to mean any kind of innovation in science, art, philosophy etc) which occurs as a result of individuals having innovative thoughts.
2. Economic growth which occurs as a result of individuals undertaking productive labour.

(As a side note, democracy is also essential, but I consider it bundled in with the above).

That is all that separates a primitive society from a modern society: the modern society knows how to do more, and has created the means to do it.

How did modern societies come to be, though? What made individuals have innovative thought as opposed to chaotic thought or having no thought at all? And what made them undertake productive labour, as opposed to unproductive labour or just remaining idle?

For any kind of growth to occur, the individuals capable of creating it must be subject to the “effort/reward dichotomy”; that is to say there must be some kind of incentive for them do it. Growth is not an incentive in itself, but the results of it are i.e. an expansion of ones freedom and liberty. It doesn’t matter whether you view this incentive from the perspective of the individual or from the perspective of society, as they are the same thing: growth is not zero-sum; as individuals we can all have innovative though and all undertake productive labour and it is never at the expense of society. And besides, you cannot separate individuals from a society and vice versa, as a society is simply an aggregate of individuals.

(As a side note, the above paragraph is explained more intelligently by Adam Smith’s metaphor of the “invisible hand”).

So it is in everyone’s interest to allow thought and labour to occur uninterrupted. More importantly, we cannot interfere with the mechanism that motivates them, i.e. incentive.

That is why I believe in perfectly free markets and why I do not believe in tax or any other kind of government interference with private business: they work to distort the effort/reward dichotomy.

Why (like the character Hank Rearden in Atlas Shrugged) would an individual dedicate their life to innovation and productivity if the fruit of their labour will be confiscated from them and arbitrarily divided amongst those who choose not, or cannot, innovate or produce themselves?

It’s not just the individual that loses out from such a pointless interference: every soul on the planet is denied that extra slice of freedom and liberty that they would have been served by the “invisible hand”.

Free! Why $0.00 is the Future of Business

So my question is, and I hope/assume it will be answered when the book is released, is if many things are going to be free in the future, what won’t be free? And most importantly, what is going to determine who the dominant businesses of the future will be?

Here’s my guess, for what it’s worth: the free stuff will be the deflating technologies; anything digital, and many things manufactured. If you’re in either of those businesses, you should be preparing for that yesterday.

The free stuff will subsidise (or serve to promote) things that cannot be deflated. As such, value will lay in:

1. Experience. My favorite marketing guru Dan Kennedy continually prophesizes that businesses that thrive in the future will be those that provide above and beyond in the realm of customer service. To me, this is a primary element of a much bigger idea: selling experiences, not just products and services.
2. Remarkability. It’s always been true that a business offering commoditized products and service will eventually be driven broke. Standardising a product or service and competing by price is a losing strategy, as predicted by basic economics; price will keep dropping until its just one increment above cost. The only way this can be done is with brute force a la Walmart. The best idea is to differentiate to shed competitors, then being free to set price.
3. Relationships and reputation. Anything from good will to celebrity endosrement. This can’t be faked or deflated.

There’s probably other stuff, but I’ll wait and see what Mr. Anderson says when Free! is released.

Mr. Anderson. I love saying that.

I consider measurement to be one of the most powerful tools in my arsenal when it comes to solving life’s myriad problems, mainly because it’s effective in fighting one of the biggest and most common road blocks to success: self-delusion for the purpose of avoiding responsibility.

Things you can improve quite easily by measurement include:

• Health: body weight, body fat percentage and calorie intake
• Personal finances: income, outgoings and saving
• Productivity: time spent working, procrastinating, watching TV etc

Or most anything else that is a factor of interest or concern in your life.

Measurement is great coercion for you to plan as well. As soon as you take two time-sequential measurements of the same thing, you have a trend. If the trend is not in the direction you want it to be, you’re naturally going to select a new target and develop a means for reaching it, i.e. make a plan.

Case Study: The Real Cost of Screwing Around On My Computer…

For the past six months I’ve been using a cool little app called Rescue Time which monitors how much time I spend using particular applications on my computer, and how much time I spend browsing particular websites. I then get a weekly summary of my activity emailed to me.

The following is a graphs of my data provided by Rescue Time:

(Note: ‘mplayerc’ is Media Player Classic (what I currently use to view video/DVD) and ‘msnmsgr’ is MSN Messenger. The rest should be obvious enough. Also note that the combined time spent on facebook.com and new.facebook.com (which, for current purposes are the same thing) is 64 hours, making it my most used app/site.)

If you accept the old axiom that “time is money”, as I do, it gets interesting when you convert the time spent on ‘leisure’ apps/sites (read: screwing around) to dollars. I’ll do it in the following way:

1. I’m a university graduate with a modest bachelors degree, so let’s say the annual net worth of my time is $40,000
2. Now let’s say that $40,000 would be gained by working 40 hours per week for 50 weeks of the year. That’s 2000 hours.
3. Divide $40,000 by 2000 hours, you’ve got a figure of $20 per hour.

Therefore you could say that the opportunity cost of one hour of my time is $20. In that case, in the last six months I’ve spent:

• $1280 on Facebook ($20 x 64 hours)
• $1040 on Media Player Classic ($20 x 52 hours)
• $680 on MSN Messenger ($20 x 34 hours)

After adding together all the ‘leisure app/site’ hours that Rescue Time logged in the past 6 months, I get a figure close to 200 hours ($4000). If you include leisure app/site time spent on other computers that Rescue Time doesn’t log, including my laptop, public computers, computers at work (shhh!), friends computers etc, the figure is more like 250 hours ($5000), and if you double that you get a yearly figure of 500 hours, which leaves me with a yearly opportunity cost of screwing around on my computer of $10,000.

Through my home business and other means, I aspire to be earning an income of approximately $200k in the next few years. That being the case, my hourly opportunity cost would increase to $100 p/h. In terms of that future income, screwing around on my computer costs me about $50,000 per year ($100p/h x 500 hours)!

Okay, I’m probably getting carried away now…

I know some screwing around is both inevitable and necessary. The point is, measuring this kind of stuff gives you a reality check that will force you to drop any delusions you may have, and to force you to start being responsible for whatever it is that you’re measuring.

I’ll leave you with a few tips for measuring that will immediately improve your life:

1. Calendarise everything possible (I recommend Google Calendar)
2. Actually read you bank statements, phone and electricity bills, pay slips etc, don’t just file them
3. Employ a tool like Rescue Time
4. Get familiar with MS Excel and start using it to record things.
5. Carry a small notebook also to record/tally things as you see fit

The broken window theory applies neatly to most systems, but there are some situations where there appears to be a significant downside to its use regarding inefficiency. It becomes apparent when you contrast:

1. Having to continually correct a system as it fails, with
2. Waiting for problems to accrue and fixing them en masse, i.e. ‘chunking’.

‘Chunking’ is the idea that it is more efficient to solve a number of identical or related tasks at the same time, rather than addressing each one individually. It leverages the fact that identical or related tasks will have common sub-tasks that can be done once with the same effect of doing them separately for each parent task.

Here’s a simple example of chunking in action: rather than cooking spaghetti sauce to eat every day, it’s more efficient to ‘chunk’ and cook a large batch once a week that can be separated into daily portions. That means the sub-tasks of preparation (washing vegetables, gathering utensils etc) and clean up (washing, drying, storing etc) need only be done once a week rather than once a day.

Now consider these example scenarios where both the broken windows theory and chunking might apply:

• Leaving a dirty plate in the sink
• Placing an unsorted document on a table
• Leaving flaking paint on the wall

The broken windows theory would suggest it necessary to clean the plate/file the unsorted document/repaint the wall straight away. But wouldn’t it be easier to chunk and wait until enough dirty plates/unsorted documents/flaking walls accrue before bothering to take action?

Let’s look further at the first example i.e. the dirty plate in the sink to compare continual correction under the broken windows theory to chunking.

1. Continual correction: each time a plate is used to eat off, continual correction requires you to clear the bulk scraps off the plate into the rubbish bin, fill the sink with water, soap up the plate, rinse it, dry it off and put it away. This would take approximately 3-4 minutes.
2. Chucking: this would have you wait for a few days until a pile of plates are available for washing, then to repeat the same procedure. It may taken an extra few minutes to wash the additional plates, but it will still provide a significant improvement in time when compared to the aggregate time required to wash each plate individually, and also a significant reduction in water and liquid soap required.

On this level, it seems the efficiency of chunking makes it a far more attractive option. I’ll present a counter point of view however:

You have to consider that a system in a downward spiral will gain more momentum the further it progresses into the spiral. In addition, there may be one or more ‘tipping points’ within the spiral where irreversible damage occurs. And if you chunk, you also don’t gain the obvious advantages of correcting the system continually, which is that the system is practically always at its potential level, rather than spending most time between say, 80% and 90% of its potential level.

The more problems you allow to accrue within the system before correcting them, the higher the risk that you either won’t be able to slow the momentum, or that you’ll pass any tipping points that may be present, plus the system will spend most time below its potential level.

Returning to the dirty dishes example, here’s the not-so obvious downside of chunking:

1. The momentum of spending an additional few days in the spiral may be very difficult to slow down in the case of dirty plates. Effective cleaning most likely cannot be done using the same method described above, since the food scraps on the plate may have dried hard; access to additional utensils, such as a scourer may be required, and perhaps it may be necessary to soak the plates in hot water as well. The gain in efficiency from chunking will probably be outweighed by the measures required to halt the acceleration and reverse the momentum back up the spiral.
2. Tipping points may have be passed: irreversible damage may have occurred to the plates once a certain threshold of uncleanliness is reached. For instance, mold may have developed on the plates and rendered them unsuitable for further use, requiring complete replacement. Perhaps the food scraps have attracted vermin as well, and now it’s necessary to trap and kill them.
3. You would have had to put up with the obvious consequences of having dirty plates in your sink for a few days: poor appearance, no room to use the sink for other things, and the lack of clean plates if you need them.

The answer of course, is to strike a balance between continual correction and chunking that correctly fulfills your requirements. This balance may rule out any chunking at all; in NO B.S. Ruthless Management of People and Profits, Dan Kennedy describes a leading Thoroughbred breeding farm in Kentucky that has:

a long, long, long approach road with white three-rail fences on both sides, horses with shiny coats in the pastures. The owners of the farm have full-time employees who do nothing but paint those fences. They start at one end, paint to the other, turn around and paint back in the other direction. Day in, day out. Why? “Because,” the owners told me, “we are judged by our fences.”

If you’re running a competitive horse farm, it may be that any broken window is a broken window too many. Leaving a less-than pristine fence on view for even one day may ruin the intended impact on customers the farm on that day.

In your situation, you have decided the level of excellence you require, and consider how much risk you will take, and how much compromise you can afford for the benefit of added efficiency.

The criminologists who presented this idea in the early eighties used it as an analogy for policing: if petty crimes like vandalism and littering are policed aggressively, then all crime would be reduced because of the message being sent. Despite criticism from authorities, the theory was shown to work in practice by Rudy Guliani. His ‘zero tolerance policy’ reduced crime in New York City across the board; murders, assaults and robberies all went down, and it began simply by cleaning the graffiti off subway cars.

The broken windows theory can be applied to any area of your life that you like. In its simplest form: the smallest compromise left uncorrected in any system will put the system into an entropic downward spiral.

My housemate and I use the broken windows theory for our gym training. We’ve made a pact to not miss a single training session, with the understanding that one missed session this week will be one missed again in a few weeks time, then it will be one missed every week, and soon after there will be no training done at all.

Some other examples of broken windows that can sometimes emerge in my life:

• An unfolded shirt left on the floor of my bedroom
• Getting to work five minutes late in the morning
• A small scratch on my car
• Missing one weeks homework for a subject at uni
• One beer on a week night

“The beginnings of excellence are kindled by engaging yourself in doing something you want and like to do. Higher levels of excellence are inspired by having a positive vision of where you want to go.”

Terry Orlick, In Pursuit of Excellence

I’ve never been able to transcend that gap between the ‘beginnings’ and the ‘higher levels’ of excellence in my life. Any achievements I have made that might be considered excellent are incidental outliers of a much larger set of mediocre, ‘promising’ achievements.

While I think of myself as talented and competent, it’s clear that I don’t yet have the focus and commitment to achieve excellent things. In The Dip, Seth Godin makes an observation about the three most common supermarket checkout strategies that I feel are relevant to my current predicament:

“The first is to pick the shortest line and get in it. Stick with it, no matter what. The second is to pick the shortest line and switch lines once (at a maximum) if something holds up your line…The third is to pick the shortest line and keep scanning the other lines. Switch lines if a shorter one appears. Continue this process until you leave the store.”

The problem with the third strategy is obvious, and I must confess that’s the strategy I’ve been guilty of using in many of my life pursuits. I guess I only stick with things so long as they interest me and amuse me, and so long as I think it’s certain I’ll gain something from them. As soon as things get boring or difficult though, I tend to jump to a different queue. So overall, while I put in a reasonable amount of effort into things, it’s rarely a committed or focused effort, so I haven’t been able to reap much reward.

I think the best thing for me now is to learn to be committed and focused, and to apply that to something I really want to achieve.

Once procrastination begins and sets in, it’s very difficult to break it. When you set a project in motion, set it faster than what you think you can handle. Promise things to people sooner than you think you can deliver them. The speed you’ll need to keep up will ensure procrastination is not possible.

Hard decisions can bog down a project if you let them, and after a while it seems like the most painless option is to give up entirely. Don’t let it get to this point. Be confident and make decisions quickly. And don’t underestimate your on-the-fly thinking. More often than not, weeks of analyzing alternatives provides the same solution as your gut instinct did, thirty seconds after the problem initially arose.

The faster a project moves, the sooner the light at the end of the tunnel becomes visible. Milestones are reached sooner. The self-satisfying feeling of accomplishment comes faster and more often. Onlookers are more impressed. This all helps motivate you.

Inevitably, there will be a dip in the project; a time when increased effort does not seem to be equating to increased results anymore. Having speed early on will give you the momentum to push through the dip and get back on the top side of the curve.

Times change. What is a great idea today, might still be a great idea tomorrow. But the next day? People move on. Speed ensures the fruits of your labor ripen when people are still hungry; and before someone else feeds them first.

Quitting is often very sensible. What happened yesterday is a sunk cost, and shouldn’t affect decisions made today. If you’re going to quit, quit fast, don’t waste another second on a dead-end path.

Most often, people move slowly to avoid making mistakes and looking stupid. One common trait among winners is they try a lot and fail a lot.

Below is a slide presentation by internet entrepreneur Mike Cassidy. Mike founded Stylus Innovation (sold two years after its launch for $13 million), Direct Hit (sold a year and a half after its launch for $500 million), and Xfire (sold two years after its launch for $110 million).