I have resisted blogging about every interesting topic discussed at the Freakonomics blog, but I could not let this topic pass by. I am a big fan of Levitt and Dubner. Their book Freakonomics has been instrumental in making economics, my undergraduate major, into a cultural phenomenon.

Relative or Absolute Wealth?

Recently Justin Wolfers started a series of thought-provoking posts about the correlation between wealth and happiness. The conventional wisdom, known as the Easterlin paradox, has been that only relative wealth matters. In other words, as long as you have more than the people that you compare yourself to, you will be happier. Even though Easterlin studied populations, many self-help books apply the same reasoning to individuals.

Wolfers and Betsey Stevenson have reexamined the idea that more wealth makes you happier using more recent, more complete data. Not surprisingly they found that in general the richer you are, the happier you are. It is true for people with higher incomes too, but the correlation was slightly lower. Despite what many people tell themselves, more money may make us happier even if admitting it makes us appear less enlightened.

Happiness seems to require a modicum of external prosperity. — Aristotle

Studying population data is never going to give us a formula for happiness in life, but clearly it is easier to be happier with the added freedom that wealth provides. Whether it is because life is less stressful without having to dodge bill collectors, there is a sense of well-being from not being dependent on your next paycheck to cover the mortgage payment or it just feels good to be able to provide support to causes you care about, having more money and the independence it brings should make you happier.

What would be even more interesting to me is a study of the differences in happiness between entrepreneurs and high income earning employees. Both wealth and income positively correlate with happiness, but income slightly less so. I think that the added autonomy of being self-employed would add to most people’s satisfaction, but then again having to make payroll during a downturn can also be a great stressor. What do you think? Does having your own business make you happier?

To read the series, read: New York Times: The Economics of Happiness

To read an article about the research, read: New York Times: Maybe Money Does Buy Happiness After All

No matter how he got started, Lander created an entertaining and sometimes thought provoking blog. When I first saw the blog, I wondered if he would ever be able to sell ads on it. Maybe he knew all along that his only chance at monetizing SWPL was to turn it into a book deal. Regardless he must be quite the negotiator to get a $300,000 advance on his first book. Kudos to him.

Why Blog? Reason No. 92: Book Deal - New York Times

Image by Ingorrr

Landing a Spot in the Retail Big Leagues

Trying to play ball with Target or Wal-Mart? Follow these eight steps for selling your product to a large, multiunit retail outlet.

Getting into the retail major leagues is something many entrepreneurs dream about. Have you ever envisioned your products on the shelves of a big box retailer but wondered just how to get your company ready for the prime time?

According to experts–and some entrepreneurs who’ve already made the leap as vendors or suppliers–there are some basic principles that can help guide you through the process. If expanding into the retail big leagues is your goal, these eight steps can help you get placement for your product.

1. Begin with questions. Before you try to make the leap to multiunit retail, ask yourself these basic questions: Does your product fit a demand just waiting to be tapped? Have you already found a multiunit retailer that’s a good fit for your product? What is it about your product that would make a buyer see fit to take a chance on your product? If you land the deal, can your production handle the volume? Do you want to sell your product directly to the retailer, or do you want to license your product to a manufacturer who’ll then distribute it for you?

To read the complete source article click here.

Refreshing Video

My Background

In order for you to appreciate how effective David Allen’s book is, I must tell you a little bit about me. I used to keep all of my appointments in my head or if they were really important, I would tell the secretary to remind me. I used my desk calendar to draw pictures while I was on the phone as well as to perform calculations. I have been known to have stacks of paper on my desk. On a final note when I was implementing my GTD filing systems on January 15, 2008, I opened some mail from 2003.

After I Read the Book

It’s been two months now since I first read the book. I can tell you with absolute certainty that I am more productive than I was 60 days ago. I have and use a filing system at work and at home. Although I still have to find time to process my in-basket, I do not find the task as daunting. I use my Google calendar faithfully to keep my appointments and my list of incompletes. Now that everything has a place, I am more relaxed and in control of my workflow.

The Book Review

Getting Things Done By David Allen

Getting Things Done was written by a life coach guru who trains people how to work more efficiently and effectively. Today more than ever, we are bombarded by incoming mail, email, text messages, requests, appointments, tasks, etc. Unless you have a system in place to process these tasks, they will be forever stuck in your mind as an “open loop“. This book gives you the tools to close these loops thereby emptying your mind of tasks.

Here is a list of a few key tools that will help you achieve “mind like water”:

• You must have infallible collection buckets.
• You must have a way to remind yourself of what needs to be done.
• In order to accomplish anything you have to know what is the exact next step.
• Anything that takes less than two minutes to accomplish should be done immediately.
• A calendar must be an integral part of you work flow management.

I do not wish to go into detail on these points given the brevity of the book. This is not your typical business book that you passively read. Getting Things Done is more of a guide that you must work with as you read in order to reap the benefits of the advice. You will find yourself wanting to read it again and again to refresh your enthusiasm for organization. The information contained could be life changing for anyone. In my humble opinion, colleges should add David Allen’s principles to the curriculum for all incoming freshman.

The Phenomenon

David Allen’s teachings have spun off almost into a culture of their own. Here are some links to GTD groups and sites. The last one is David Allen’s site.

http://finance.groups.yahoo.com/group/Getting_Things_Done

http://groups.yahoo.com/group/GtD_Palm

http://googlegroups.com/group/43Folders

www.43folders.com

www.davidco.com

Here is a sample of Mr. Allen’s seminars.

Getting Things Done and Entrepreneurship

No matter what life you live, organization is an integral part of success. Wether you are a stay-at-home mom or the CEO of a fortune 500 company, GTD can help you. These skills are especially important for anyone who aspires to be self-employed. When you are organized, you can relax; once you relax, creativity flows freely. Going with Tim’s rating scale, I would call this book a buy. Buy a copy for yourself and share it with a friend when you are finished. You won’t be disappointed.

New York Times:

If there is one thing that separates the self-employed from those employed by others, it is their preoccupation with health insurance.

I was reminded of this on Feb. 14, when I wrote a post on the Shifting Careers blog asking small-business owners and would-be entrepreneurs what they were doing about health insurance. Within hours, scores of people posted comments about their own experiences and, if they had managed to find good resources, shared those. I have been reading e-mail messages and trying to make sense of the subject ever since. In short, it is not pretty out there.

The unluckiest are those with chronic illnesses or the dreaded pre-existing condition that results in a denial of coverage. Many of these people abandon dreams of entrepreneurship altogether because they need jobs that come with a health plan and they cannot find a way to self-insure.

Photo by xferedgg

We all know talented people who stay in corporate jobs solely because they fear losing access to health insurance. Many have significant experience and adequate start-up money, but find themselves unsure of how to, or even if they can, bridge the coverage gap between COBRA and Medicare. Preexisting conditions, either their own or a family member’s, keep many would-be entrepreneurs from going out on their own. Is this really what’s best for our economy?

How Did We Get Where We Are?

As evidenced by the theme of this blog, I have great respect for our Founding Fathers and their Age-of-Enlightenment ideal of self-reliance. Part of the American ethos is the goal of pulling yourself up by your bootstraps. But pulling yourself up by your bootstraps is only possible when you are well enough to put forth the effort. Moreover, one cannot reasonably compare the healthcare available in the 18th century to our present system. Even for the gravest of conditions, it may have been prudent to avoid a doctor in colonial American given that germ theory and routine hand washing were more than a century away. In any case, the first health insurance policy wasn’t offered in the U.S. until 1890.

So how did it come about that most Americans obtain health insurance through their employer? World War II Specifically in 1942, the National War Labor Board imposed a wage freeze on employers, but did not include health insurance and other fringe benefits in its freeze. This led many employers to offer health insurance in lieu of wages to retain their best and brightest.

A Level Playing Field for Small Businesses

• 80% of U.S. employees work for a small business
• Employees of small business pay 18% more for premiums on average

While it is difficult to make direct comparisons with other countries primarily because they moved to universal coverage some time ago, entrepreneurship continues to thrive in other industrialized countries such as Ireland despite, or possibly because of, universal coverage.

Current Small Businesses

Small businesses pay a disproportionately larger share of the cost to cover the uninsured through their significantly higher premiums per employee. At the very least, our current system makes it harder for them to provide competitive benefits to their employees. It may even discourage some highly skilled, but insurance-sensitive people from considering an offer from a small business. As the Reuters article below demonstrates, healthcare costs are a real issue for small businesses today. But what about the new businesses that haven’t been started?

Potential Entrepreneurs

New York Times:

“If Bill Gates had to worry about health insurance would he have started Microsoft? Who knows,” said Katherine Swartz, an economist at the Harvard School of Public Health.

The cost and availability of healthcare coverage discourages many would-be entrepreneurs from venturing out on their own. The value that these businesses would have created, but for the current system of coverage, is difficult to estimate. Nonetheless, can we afford such a deterrent to would-be entrepreneurs? Small business is the engine of growth in our economy. How many people are waiting in the wings to forge out on their own if this one issue is addressed? If our system continues to punish the risk takers, don’t we all lose out by having a smaller, weaker economy?

Reuters:

The mom and pop businesses that make up the bulk of America’s employers, key players in scuttling health reform during the Clinton years, say years of crushing costs have them backing major changes this time around.

The National Federation of Independent Business helped derail President Bill Clinton’s effort to overhaul the health insurance system during the 1990s, with a massive direct mail and telephone campaign, and a blitz of lawmaker lobbying.

Now, small companies with an average of 10 workers are bearing the greatest burden of insurance premium increases, which have grown twice as fast as inflation for several years. They’ve started lobbying the presidential candidates early and are pushing for changes to taxes and state laws.

This product is a perfect example of building a better mouse trap. We all know how to make pancakes; but let’s face it, Americans are pressed for time. Not only do I think this is a great idea, but the branding is phenomenal. I watched the commercial one time and can’t wait to see if they taste good. Maybe its just the Tim Taylor in me, but any product that uses propulsion is something that has my attention. I know my son will love this one, and I am looking forward to making pancakes with him. From a business standpoint, they have sold 40,000 cans. I am sure if the product is even decent that that number will be millions two years from now. Way to go Nate Steck! The article below is just an excerpt. Please read the full article here.

New invention turns pancakes into canned cakes

By MICHELLE LOCKE Associated Press Writer

Article Launched: 03/07/2008 12:02:43 PM PST

SAN FRANCISCO—You want pancakes, but the idea of adding water to powder and stirring it around just seems like too much effort. Enter Batter Blaster, the pancake you just point and spray.

Gastronomic genius? Or sign of the apocalypse?

It all depends on how you feel about really fast food.

For Nate Steck, part of the two-man team that developed Batter Blaster, the product is a way to put something hot and tasty on the table of people who have lost touch with the most important meal of the day.

“If you sit down with your family in the morning, you can cook these pancakes so quick,” he said in an interview in Batter Blaster’s new offices in a south-of-Market alley in San Francisco.

“You can actually give the house that smell of home cooking,” Steck said. “You’re not burning the frozen waffles in the toaster. This heats up the house. The kids like it; they feel like they’re spending some time with the family.”

The contents are pressurized and the can has a nozzle similar to a whipped cream can, which can unleash artistic aspirations in the way of animal, geometric and letter-shaped pancakes.

Preparation: Shake the can firmly before spraying. Clean up: Rinse the nozzle under running water after using.

The product, which is organic, comes more than a century after the launch of the first convenience pancake product, a powdered mix that eventually would be called Aunt Jemima Pancake Mix.

And Batter Blaster begs comparison to other ultra-convenience foods, such as Easy Cheese, that staple of dorm room soirees, and Reddi-Wip, the ubiquitous canned whipped cream.

Some flip for the spray-and-bake breakfasts.

“They’re fantastic,” says Keith Bussell, a Los Angeles software developer who picked up a can of Batter Blaster on a lark and was won over by the ease of making just one or two pancakes sans stirring. “It’s not an approximation of pancakes. They’re really good pancakes,” he said.

Sometime I know I feel overwhelmed by my gadgets and methodologies. I find for me that the best way to set goals is the old fashion way. Sit down with a piece of paper in hand and write out your goals. I do mine annually with a quarterly review to see how far along I am for the year. You can read all of the how too books in the world but if you don’t do the simple things like put you goals down in a concrete for that you can come back and measure later, you might find yourself with a lack of direction in life. Please read this large quotation below with an open mind as it is written for second grade audience. For fellow parents out there, print it out and do a goal setting exercise with your kids its fun.

PS. Thank You Miss Taylor for teaching life skills in your classroom.

Goal Setting

What is a Goal?

You set a goal whenever you say “I want to….. Your goal might be you want a pet dog.

Why are Goals Important?

When you have a Goal, it makes you feel full of energy. Having a Goal makes you feel good about yourself and about everybody else. It makes life much more Fun!!!

When is a Goal a Good Goal?

Its always good to have a Goal. But there are ways to make Goal Setting even more fun!! Here is a list of four things that make a good Goal:

1) A good Goal says Exactly what you want.

For instance, you might say “I want a pet.” That’s not a very exact Goal, is it? If you said, ” I want a pet Dog,” that would be a good Goal. But suppose you said ” I want a dog, that will be a little bit smaller than me, it will be brown and black, it will have big pointy ears, and a nice long tail,” then that would be an EXCELLENT Goal, because you are saying EXACTLY what you want.

2) A good Goal says When you want it.

If your goal I ” I want to get good grades at school, ” to make it a good Goal, you would say something like: ” I want to get grades that are one grade higher that the ones I got in my last report card. And I want to get these grades by the time I get my next report card.” That way, you’re saying Exactly what you want, AND you’re saying Exactly When you want it!

3) A good Goal is when you believe it.

If you said, ” I want to learn to fly like a bird,” that’s not a good Goal, because you can’t believe it, because you know you haven’t got wings! But if you say, I want to learn to hang-glide next summer, ” then that’s a good Goal, because you know that it is possible, so you can believe in it!

4) A good Goal says HOW you’re going to get it.

To have a good Goal, you need to make a PLAN. This is great fun! The plan will be different for every Goal, because every Goal is special. You will need a big piece of paper. This is how to do your plan

 

Plans for Goal Setting

a) Write out your Goal at the top of the page. When you write it, pretend you are already in the process of getting it now! For instance, you might write, “I’m going to get a pet dog,” or “I play football better and better.” There is a part of your brain called the “Lower” brain, and this part thinks about your goal all the time, even when you’re thinking about something else. This Part of the brain doesn’t understand about “now and “later.” So you must write your goals as if you’re starting to achieve it already, so the lower brain can understand it.

b) Under your Goal, write WHY you want it. Try to think of as many reasons as you can! If you write, ” I want to get better grades in school to please Mom and Dad, and so that school will be more fun, and so that I can help other children with their lessons, and so that later on, I’ll be able to choose from many different subjects at school, and so that , when I grow up, I’ll be able to do whichever job I most want to! If you wrote that many reasons, then your Goal would be so special, nothing will stop you from getting it!

c) Next, write When you want your Goal. This could be a week or 2 weeks or even a year!

d) Now, you need to write down exactly what you will need to do to get your Goal. To do this, work backwards. Take your Goal and say, What is the step Before this?’ For instance if you want to get better grades at school, the step BEFORE that might be to do your homework as soon as you get home each night.

It’s often a good Idea to ask Mom and Dad for help with making your plan. They might have had similar goals in the past and can suggest steps to help you complete your plan.

What if I don’t get my Goal first time?

It doesn’t matter! Mr. Edison, the man who invented light bulbs tried thousands of ways to make light bulbs before he found a way that worked.

And each time he tried something and it didn’t work, Mr. Edison said “I’ve learned another way not to make a light bulb!- and he was happy, because he had learned something. Then he tried a New way, until he got his goal of making a light bulb.

Risk comes from not knowing what you’re doing.

I have nothing but respect and admiration for Warren Buffett and his remarkable record, but his skill set is inimitable for most people. Even though the principles of value investing are readily available to anyone who reads The Intelligent Investor, making a fortune the way he did requires a substantial dedication to developing strong analytical skills. Here are a few of the top 20 that I find most inspiring both for the simplicity of their businesses and their impact on the marketplace.

Ingvar Kamprad & IKEA

I am in the middle of reading Daniel Pink’s A Whole New Mind and what strikes me is how ahead of his time Mr. Kamprad was. One of Pink’s Six Senses is “Not just function but also DESIGN.” While Target gets a lot of credit for leading this change in the U.S., IKEA has been a world leader in bringing tasteful design to inexpensive home furnishings. In an age of CEOs who have enriched themselves while destroying shareholder value, it’s nice to know that Mr. Kamprad still flies economy class and decorates with IKEA furniture. Who knew we had so much in common?

Karl & Theo Albrecht & ALDI

Technically the Albrechts inherited some of their fortune even if it was a single corner grocery store in post-World War II Germany. In some ways, ALDI’s success is remarkably similar to IKEA’s in that they brought great value to the masses. ALDI and now its Trader Joe’s stores provide high quality private label food at rock bottom prices. ALDI was also a leader in the retail trend of charging for plastic bags to prevent waste. Thanks to the Albrechts, we all have a clearer idea of how much of the cost of a trip to the grocery store goes into advertising national brands and store overhead.

Mark Zuckerberg & Facebook

Lastly, Mark Zuckerberg may be #785 on the list, but he is still only 23. Although the technical infrastructure behind Facebook is complicated, the value of social networking is easy to understand. People want to stay in touch as effortlessly as possible. Facebook is the kind of inspiring start-up that was unimaginable just a generation ago.

Remarkably, all four of these billionaires have kept their companies private.

Who do you find most inspiring on the Forbes list?

Forbes: The World’s Billionaires

Escape from Cubicle Nation: Perfectionists are losers

Although I believe that nurture probably matters more than nature, it is interesting to read that testosterone may predispose people to entrepreneurship. Short of getting testosterone shots, the practical take-away for me is to keep up the strength training at the gym.

Seeds of Growth: Entrepreneurs and Evolutionary Biology

Finally, BusinessWeek ran an interesting article on the implications of social media for business.

Social Media Will Change Your Business