There are two types of people; those that believe that there is a fixed amount of resources available, and those that don’t. Those that believe that in order to get what you want, you have to take it from someone, and those that believe that you can create all the wealth you want. Kessler is definitely the later. “Eat People” is all about creating wealth so everyone (but the creator most of all) can be more wealthy. His point is that there are those out there who have helped make the world a richer place to live for all of us, apart from any of their personal philanthropy. He says that if follow the 12 rules – plus bonus rule- below (or at least most of them), and you are going to be a success.
Overall, the book was enjoyable. Kessler is an entertaining author, and has a point, and a bit of an attitude to go with it (which makes it more entertaining), but the book wasn’t fantastic. There wasn’t anything life changing here.
1. Scale it – If you raise prices, you’re dead. Lower prices. Always lower them. If you cut your price by half, the volume should more than double. Find something that you can scale, and thus continuously improve and lower prices.
2. Waste what’s abundant to make up for what’s scarce – Efficiency is a bad word. If you’re looking to be efficient, then you’re working with something that’s scarce. That’s a problem. Find something that is abundant, and waste as much as you need to, to make what you’re looking for. To take the place of something that’s scarce. “The chief scarcities are human ingenuity and time. They are what become scarce when everything else becomes abundant. As bandwidth and computation become abundant, for example, they can compensate for the scarcity of time and some human functions.”
3. Get horizontal – stay small, stay focused. Work with, as Jim Collins says in Good to Great, what you can be the Best in the World at. And nothing else. Add your piece to the pie, and don’t attempt to take the whole pie, because you’ll fail. Stick with what you’re good at.
4. Intelligence moves out to the edge of the network - Open up your system/product, and allow others on the edge to provide modifications/apps. There are a lot of smart people out there what you don’t know, and would otherwise never know, and who may have ideas for your product that you would never have, that could help. Don’t get in their way.
5. Wealth comes from productivity – be a creator, not a taker. Produce something to benefit all society, otherwise, you’re not making true wealth.
6. Adapt to humans, don’t make humans adapt to you – i.e. think of what Microsoft, and the computer mouse did to computers, compared to DOS. It’s much easier to look and click, then type in commands. Find a way to make something easier, more natural, for people to do it.
7. Eat people – find jobs that can be automated. You can always make more technical jobs in other areas, but find cheaper ways to do something that humans currently do, but don’t have to.
8. Markets make better decisions than managers – trust the market, it’s usually right.
9. Embrace Exceptionalism – There are some very smart people out there. Find them, and embrace them.
10. Be a market entrepreneur and attack political entrepreneurs – Market entrepreneurs produce value, political entrepreneurs take advantage of a certain law, or right , charge high fees, and sit back and watch the money roll in (think cell phone operators – there are only so many allowed). Find a way to undercut them (i.e. skype vs telephone operators). Be cheaper, and undercut them, because they aren’t adding value, they’re becoming rich for doing nothing. That can never last.
11. Use zero marginal cost to create a flood – don’t charge for what’s free (or almost free), or someone else will under-cut you (think online storage). Use the free to help support your product/service.
12. Create your own scarcity with a virtual pipe – make people need to use your product (i.e. – look at Apple, and how all their products only work with apple. They can sell songs through ITunes at a loss, and then make it back through sales of ipods. Or Nintendo, who used to sell their platform at a loss, but charged other companies for the rights to build games for their platform.)
13. (Bonus) – Money sloshes to the highest returns. – high returns means access to more capital