Resume, cover letter and networking; p. 116 Mock interview: Standard questions, case resolution and salary negotiation; p. 137 Effective communication: Public speaking and writing style; p. 179 Personal branding: Pitch, marketing tips and social media strategy; p. 194 Financial advice: Evolutionary psychology, entrepreneurship and money; p. 222 Career advice: Market skills and the pursuit of happiness; p. 273 Coaching; p. 308
of scale Today, winner-takes-all economy—middle class at risk Public sector: Comparative advantage, deregulation, stability Protectionism: Patriotism (right), anti-globalization (left) Occupy Wall Street! 2/3 believe in greater wealth distribution Tax competition, the rich gain negotiation power (75% IRPF)
of the market Heterogenic K in a dynamic environment—disequilibrium Knight: ‘Judgmental decision-making under uncertainty’ Dispersed knowledge and price discovery… profit or loss Government role: Property rights + Economic freedom Taxes, QE and regulation harm market—efficient—outcomes
deficit are at nightmare proportions. In the days of the free market, when our country was a top industrial power, there was accountability to the stockholder. The Carnegies, the Mellons, the men that built this great industrial empire, made sure of it because it was their money at stake. Today, management has no stake in the company.
cost, trade-off (what are you giving up?) Pain of paying (cash vs. credit, prepayment, the price of free) Mental accounting: I assign fungible € to diff. spending categ. Show hard work! Reluctance to pay when non-observ. effort Hedonic treadmill, constantly readjusting (Wolf of Wall St.) Grades or wages, don’t compare yourself with people around
your 20s Invest in yourself: Education, trips, experiences… learning And buy the 4€ Frappuccino… if it really makes you happy Personal finance is more about budgeting, avoiding mistakes Economic freedom: Choices, quitting optionality Cash-flow positive, low burn rate, opportunity cost of extra €
You know what I am? I'm a dog chasing cars. I wouldn't know what to do with one if I caught it. You know, I just do things. The mob has plans, the cops have plans, Gordon's got plans. You know, they're schemers. Schemers trying to control their little worlds. I'm not a schemer. I try to show the schemers how pathetic their attempts to control things really are. So, when I say that you and your girlfriend was nothing personal, you know that I'm telling the truth. It's the schemers that put you where you are. You were a schemer, you had plans, and look where that got you.
in your work. You have to fall in love with your work. Never complain about your job. You must dedicate your life to mastering your skill. That’s the secret of success and is the key to being regarded honorably. —Jiro Ono
Center: Resume Tips Before: Reflect on which skills, knowledge and experience would make an ideal candidate for your target career and make a list of your matching qualifications; chronological resumes (last job goes first) work best when staying in the same industry, progressively responsible employment; functional resumes (focus on skills and professional experience) are useful when starting or changing careers Format: One page x 10 years of experience; create a visually appealing, easy-to- read resume, make it as simple to navigate as possible (basic and clean); keep sentences short and direct (clear vocabulary); choose from the typical components what makes sense for your resume; be uniform in the use of formatting; include dates on the left-hand side and job title and location of employment on the right; the resume is just another marketing tool, associate it with your personal brand
Center: Resume Tips Content: Key skills for that particular industry and position; include your titles, numbers and names (prominent figures in the industry with whom you worked); quantify your accomplishments; do not mention confidential information; never lie; describe your milestones in simple but powerful statements in active voice; list volunteer work or training that adds to your skill set; if you have extensive experience, summarize earliest jobs in one line; employers now use keyword- searchable databases, utilize industry keywords throughout your resume ¤ 1 out of every 200 resumes and 1 out of every 12 interviews result in a job, getting what you want in today’s ultracompetitive job market is about details ¤ Employers only spend 20 seconds on each resume, showcase achievements in a way that grabs their attention… proper bold/underlining, proper typography
Resume Mistakes 1. Typos: It signals lack of care, you can’t be trusted… automatic dismissal 2. Incorrect information: If you make it to the interview, it may come out then 3. Giving the same resume: No two roles are alike, your CV shouldn’t be either 4. Getting too elaborate with formatting and style: Same size, same font, no shit 5. Being vague: Be creative with language… show personality and creativity 6. Squeezing too many words onto the page: Don’t mention irrelevant positions 7. Omitting exact dates: It raises suspicion you’re trying to cover something up 8. Not including skills: Mention your main strengths in profile section 9. Objective statement: Create a headline that accentuates value for the position
Center: Cover Letter Tips Format: Keep it to one page; divide it into three paragraphs (first, introduction, state how you heard of the position and articulate how your qualifications fit with the job offer; second, elaborate on your accomplishments; third, emphasize your enthusiasm for the job, indicate your wish to meet with the employer in person); use standard business format (font and typeface), convert to a plain text and send it in the body of the email (not as an attachment); always proofread carefully Content: Highlight accomplishments and achievements rather than duties and responsibilities; focus on specific items from your resume that are relevant to the position; give real-life examples; tell the employer what you can do for her; reflect the language of the specific job advertisement when describing your qualifications Style: Use formal language and uncomplicated structures; steer clear of clichés
are rules. There aren't. We used to be gorillas. All we had is what we could take and defend. It’s a red tide, Lester, this life of ours. The shit they make us eat, day after day, the boss, the wife, wearing us down. If you don’t stand up to it, let’em know you’re still an ape, deep down where it counts, you’re just gonna get washed away.
Points • InfoJobs? Really? The best paid jobs are always in the shadow market • 70% of vacancies won’t be published… get there by references, personal trust • Not interested in a perfect CV (everyone has it!), I am looking for authenticity • Networking only works when mutually beneficial, a problem in your 20s • Anyway, don’t use it as an excuse and build before graduation, follow up • Networking has to be sincere, genuine (3 meaningful friends > 900 Facebook) • Twitter better than LinkedIn, deeper connections… and weak ties • Think about it as a l/t investment, you won’t get his/her number tomorrow • Play the signalling, turn off the cell phone at the start of your meeting • Some relationships are 0-sum games: Are you giving more than you’re getting? • No reward without conflict—cut some people off, take the connector role
Secrets that Will Help You Master Conversation Skills 1. ‘Be yourself’ is often bad advice: Act enthusiastic no matter what you are like 2. Emphasize similarity: Sales up 20% when mimic listener’s body language 3. Get them talking: Do not be a conversational narcissist 4. Make them feel good: We prefer likable people over competent people 5. How to keep a conversation: Add to what they say and bounce the ball back
Review: Networking When You Hate Talking to Strangers 1. Make them come to you: When you’re the speaker, people approach you 2. Bring a friend: But do not spend the evening talking with him 3. Have a few opening lines: «How did you hear about the event?» 4. Research in advance: Google them, look for commonalities you can bring up
Win Friends and Influence People (Dale Carnegie) ¤ Fundamental techniques in handling people 1. Don’t criticize, condemn or complain (active and constructive) 2. Give honest and sincere appreciation 3. Arouse in the other person an eager want ¤ Six ways to make people like you 1. Become genuinely interested in other people (Dale’s dog unconditional love) 2. A simple way to make a good first impression: Smile 3. A person’s name is to that person the sweetest sound in any language 4. Be a listener, encourage others to talk about themselves (Homer’s broken jaw) 5. How to interest people: Talk in terms of the other person’s interests 6. Make the other person feel important—and do it sincerely
Win Friends and Influence People (Dale Carnegie) ¤ How to win people to your way of thinking 1. The only way to get the best of an argument is to avoid it 2. Show respect for the other person’s opinion—never say: ‘You’re wrong’ 3. If you are wrong, admit it quickly and empathically 4. Begin in a friendly way; a drop of honey catches more flies than a gallon of gall 5. Get the other person saying ‘yes, yes’ fast; 6. Let the other person do the talking 7. Let the other person feel that the idea is his or hers 8. Try honestly to see things from the other person’s point of view 9. Be sympathetic with the other person’s ideas and desires 10. Appeal to nobler motives; 11. Dramatize ideas; 12. Throw down a challenge ‘Stating a truth isn’t enough; the truth has to be made vivid, interesting, dramatic’
Win Friends and Influence People (Dale Carnegie) ¤ A leader’s job often includes changing your people’s attitudes and behavior 1. Begin with praise and honest appreciation 2. Call attention to people’s mistakes indirectly 3. Talk about your own mistakes before criticizing the other person 4. Ask questions instead of giving direct orders 5. Let the other person save face 6. Praise the slightest improvement and praise every improvement 7. Give the other person a fine reputation to live up to 8. Use encouragement—make the fault seem easy to correct 9. Make the other person happy about doing the thing you suggest
Career Center: Interview Tips Before: Build upon your pitch by targeting it to the company; research about the fundamentals of the industry; find a reason (why do I want to work there?) During: Dress appropriately (formal or informal); arrive 15’ early; make a good first impression through confident voice and strong handshake (verbal and non-verbal cues); maintain 80% eye contact; listen carefully to determine what he is looking for and tailor your pitch accordingly; ask questions; reiterate your interest in the position by claiming you want the job and ask about future steps; prepare, prepare, prepare… and then be spontaneous After: Take notes immediately after the interview to accurately record your impressions; send a thank you note within 24 hours to your interviewer that state your interest and underscore how your qualifications match the company’s needs
Questions • Walk me through your resume (Be consistent, target the answer accordingly) • One word that describes you best? How would your classmates describe you? • What are your strengths? (Skills that correlate to the job you are applying) • What are your weaknesses? (Improved and non-essential skills) • Tell me about yourself (College anecdotes and selling proposition) • A book you recommend? Favorite movie? Hobbies? (Play it politically correct) • Tell me what you know about this company (Extensive research about KPMG) • What did you like about your last job? (Speak with passion and commitment) • What did you dislike about your last job? (Say it was not challenging enough) • Why did you leave your previous job? (Don’t talk crap about your ex-boss) • Previous job responsibilities (Describe with detail and connect, keep it positive)
Questions • Give me an example of a person you think has integrity and explain why • A group you led in the past (Leadership, communicate a sense of purpose) • Do you get shit done? (Creative thinking, willingness to address an issue) • Describe a losing experience (Something non-catastrophic, smart failure) • A commitment you failed (Take responsibility from your actions, learning) • A difficult situation (Itemize what you did to solve it, how to handle stress) • In what ways would you contribute to our organization? (Review the job offer) • Choose between personal agenda and KPMG (Don’t say anything stupid!) • Where do you see yourself in 10 years? (Checking for obedience… misfit?) • Should I hire you? (Airport test: You and the interviewer stuck there for 1 day)
Sachs Questions ¤ Accounting/Finance/Valuation • What are the 3 main financial statements? How are they interconnected? • How a €1M increase in depreciation expense affect the 3 financial statements? • When should a company issue stock rather than debt? When to buy back? • Is 15 a high P/E ratio? Walk me through a discounted cash flow (DCF) ¤ Stocks/Bonds/Interest Rates • Name 3 companies that you think are undervalued and why? 3 overvalued? • Where do you think the market is headed? Interest rates in 1 year? Fed policy? • What makes a LBO candidate? Do you think financial markets are efficient? • Who was the best/worst CEO of 2015? Advice to Apple CFO? What is beta?
You Can Ask • Typical day for someone in the position (Expected goals and responsibilities) • What roles will I fill? (Division of labor inside this department/company) • Who would my colleagues be? (Insight into team dynamics and personalities) • What advice would you give going into my first years as analyst? (Key data) • How would you describe your leadership style? (Company ethical values) • Skills of those who are most successful (Professional development) • A formal process for advancement within E&Y (It proves your ambition) • Your mission/corporate culture (How my profile fits into this company) • Greatest opportunity facing this organization (Where the company is headed) • How have you handled the intense banking lifestyle? (Don’t joke with drugs!)
C A R E E R L I B R A R Y Questions 1. Why do you want to do investment banking/investment management/ whatever career you plan to pursue? This is a question you are almost guaranteed to receive. First and foremost, you must emphasize that you know what the finance department in which you are interviewing does. Talk to as many people in the industry before the interview to get a good idea of the job function’s day-to-day tasks as well as the general description of the work a person in that job is asked to perform. Then, when asked the question, you need not state that you’ve yearned to be in finance your life, but you should illustrate succinctly that you know the job functions of the position for which you are interviewing, that you enjoy performing these functions, and that you have developed the core skills required (i.e., analytical ability, good communication skills, and, of course, a strong work ethic and willingness to put in the hours to do the job). 2. What exactly do investment bankers (or investment managers, etc.) do? Don’t laugh. You’d be astonished at how many people go to interview with Goldman Sachs or Fidelity Investments without having a clear idea of what they’ll be doing if they actually get the job. You are very likely to receive this question if you are a career-changer or if you have a non-financial background. You’d better know the basics of your industry – for example, that investment bankers raise capital for companies in the public or private marketplace or that investment managers manage money for individuals and institutions. 3. Here’s a whiteboard. Stand in front of it and present a chapter from your favorite finance textbook. You have five minutes. May we suggest not selecting the introduction? The point of this question is twofold. First of all, the interviewers want to test your ability to explain complicated financial matters in lucid terms. Secondly, they want to test your on-the-spot presentation skills. Practice with a friend – even with your professor, if you can – until you’re comfortable presenting this material. 4. Walk me through your resume. Again, highlight those activities and previous positions that are most applicable to the core finance skills. Also talk about the things you are proud Vault Guide to Finance Interviews The Financial Services Industry Vault Guide to Finance Interviews Visit the Vault Finance Career Channel at hwww.vault.com/finance — with insider firm profiles, message boards, the Vault Finance Job Board and more. 13 C A R E E R L I B R A R Y Vault Guide to Finance Interviews The Financial Services Industry of and that set you apart. Finally, illustrate that your educational and career moves follow a logical sequence. 5. Let me give you a situation: It is Friday afternoon. Tomorrow morning you have to catch a flight to Boston for your best friend’s marriage, and you are in the wedding. You have informed your deal team well in advance and they know that you will be gone. Just when you are about to leave, you find out that a client wants to meet with the banking team tomorrow. What will you do? One of the big assets you bring to a finance position, especially those with investment banks, is your attitude towards work. This is a rather tricky question, but use this to express the fact that you understand the hardships that an I-banking career would involve, and that you have endured such sacrifice situations previously. 6. Say you are supposed to meet your girlfriend for dinner but the MD asks you to stay late. What do you do? Can you give me an example of a similar situation you have faced before? Another attitude question. Be prepared. 7. Why should we hire you? When answering an open-ended question like this, try to make them insightful and entertaining like you did for your school applications. Again, this question begs you to illustrate that you understand the position for which you are interviewing and that you are hardworking, analytical, and team-oriented. Prepare examples and as you do, think of them as if they were speeches. What would your stories and anecdotes be? Would they be exciting? Funny? Insightful? Absorbing? Something that the audience would remember for a long time? Unique? 8. Why did you decide to do an MBA? If you are an MBA student looking for a finance position, you are probably going to get this question. If you came from a finance background, you can talk about how you thought you would add to your skill set by going to business school, and how that expectation has panned out. If you did not, simply answer the question as honestly as you can. As an aside, it is perfectly appropriate to respond that you are getting an MBA as a means for changing careers.
C A R E E R L I B R A R Y Vault Guide to Finance Interviews The Financial Services Industry 9. What types of activities did you pursue while in college? While it may be all good and well to talk about the soup kitchen, remember that you’re interviewing for intense, stressful positions. Says one interviewer, “We love to see people who worked part-time, went to all six of their classes, got As and don’t seem to need sleep. Frankly, banks like people in debt who will kill themselves for the big bonus. I believe ‘hungry’ people are highly valued in the interview process.” 10. Why are you applying to this firm? Do your research and find out what each firm prides itself on, whether it be international presence, team-orientation or social environment. Get ready to talk about the industry and the firm specifically. For some firms (smaller, specialized I-banks like Lazard, for example), this is an especially important question. Says one insider at a boutique firm, “You definitely want to have someone who knows what they’re getting into. I don’t think its advisable to say I’m looking at all the bulge-bracket firms – plus [yours]. You want to see people who are very focused.” And even at those big firms that all seem the same, your interviewer will be impressed and flattered if you can talk about how his or her firm is different and why that interests you. 11. Give me an example of a project that you’ve done that involved heavy analytical thinking. Candidates without a financial background should have an answer prepared for this question that describes a work or school project, focusing on the part that required a lot of number crunching. 12. If you were the CEO of our bank, what three things would change? An interesting question. This question assumes, first of all, that you’ve done enough research on your potential future employer to answer this question. Telling your interviewers that you’d open an office in Shanghai may be a good answer – but not if the firm already has an office in that city. Be prepared to defend your answers. Avoid being too negative – “I’d fire the CFO” is a bad answer if one of your interviewers works with him. 13. What is your favorite web site? Up to you. If you own stock, it’s fine to choose a site like Ameritrade. You could choose Vault, for the research on your favorite firms. If you want to impress them with your business savvy, you could simply choose a web site Vault Guide to Finance Interviews Visit the Vault Finance Career Channel at hwww.vault.com/finance — with insider firm profiles, message boards, the Vault Finance Job Board and more. 15 C A R E E R L I B R A R Y Vault Guide to Finance Interviews The Financial Services Industry that you think is run especially well, like eBay. Just be prepared to back up your answer with specific information. 14. Tell me about the stock price of a company in your prior line of work. Make sure you’re conversant with how your previous employers (or competitors) are doing before you interview. 15. Give me an example of a time you worked as part of a team. You’re sure to get this one. Draw on experiences from previous work experience, from volunteer activities, and from any other situation in which you worked with others toward a common goal. Highlight your strengths as a team member: empathy, collaboration and consensus-building are good themes to emphasize. 16. What is the most striking thing you’ve read recently in The Wall Street Journal? A variation of this question is: “What publications do you read regularly?” With these questions, your interviews want to see how well read you are, how interested you are in finance, and how well you can describe any of the recent burning financial issues. Read the Journal regularly, especially when it is close to the interview time. We suggest starting with 45 minutes a day and gradually bringing that down as you become more efficient in your information-gathering. 17. Describe a project you have worked on that you enjoyed. Yet another opportunity to show that you are a hardworking, responsible, analytical team player. 18. Let’s say I give you this summer job/full-time job today. Now let’s move to the future and say that at the end of the summer, you find out that you did not get a full-time offer, or that six months into the job you are fired. Give me three reasons why this could happen, and what you can do to prevent this. This is a twist on the “what are your biggest weaknesses” question, made specifically more stressful for the finance interview. Don’t lose your cool, and have answers prepared.
C A R E E R L I B R A R Y Vault Guide to Finance Interviews The Financial Services Industry 19. Think of a person you feel knows you very well both professionally and socially. If I were to call this person and ask him to describe you, what would he say? Yet another version of the strengths and weaknesses question. 20. What motivates you? Think through this one. First of all, you should indicate that you are highly motivated. Second, remember the profile that finance interviews are generally looking for. Appropriate answers include financial security, problem-solving, deadlines, and productivity. Again, be prepared to give examples. 21. Can you give me an example of an experience of failure? You should have an answer prepared for this question. Be modest and admit that you have experienced setbacks. Also, focus on how you bounced back from the setback and what you learned from the experience. 22. You don’t seem like you are a very driven person. How will you be able to handle a job in banking? A stress question that can easily hit you at the tail end of a long and tiring interview process. After meeting with more than a dozen people in a day, it may be very easy to appear worn out, which is precisely what you must avoid – you must convince your interviewer that you don’t wear out easily by displaying good energy. Come up with good examples of a time when you were totally driven despite fatiguing circumstances. 23. Tell me about an accomplishment that you are proud of. This is your chance to shine. Remember: team-oriented, analytical, hardworking, dependable. 24. What was your favorite course in school? Your least favorite? Why? What were your grades in each? Have a few choices ready and be prepared to justify them. Don’t say that you didn’t like a class because it was “too hard” or “had too much math” or even that “the professor was unreasonable” (because your interviewer may wonder if you’ll think your boss unreasonable as well). Remember that your interviewer most likely has your transcript in front of her, so don’t try to inflate your grades. 25. Tell me how you have modeled with equations in the past. If you’re an economics major, or if you’ve owned a business, you shouldn’t have a problem answering this question. Even if you’re a non-finance major, you should have at least one class or real-life example you can provide. If you’ve never done financial modeling, do at least one example before the interview or have someone walk you through the process. 26. Who have you talked to at our bank? This is actually a good sign – your interviewer may ask them for impressions of you. You should remember the names of any representatives who have attended campus career events. Hopefully, in your research you’ve connected with people at that firm. 27. Can you tell me about a time when you handled many things at the same time? In some finance positions, especially I-banking, multi-tasking is an important attribute. Think through your background and prepare for this question. 28. What would you like for me to tell you? Remember, you will be asked if you have any questions. Do your research and impress your interviewer with your knowledge and insight. However, don’t ask transparent questions that seem like you are only asking them because you have to. And, again, when in doubt, ask about their own personal experiences. 29. What is a hedge fund? This is obviously a popular question for those candidates interviewing for the increasingly popular and prestigious hedge fund positions. Surprisingly, many candidates have no feel for what distinguishes a hedge fund from other types of funds. A hedge fund is a private investment partnership which uses aggressive strategies unavailable to other types of funds, most popularly mutual funds. Hedge funds are required by law to have less than 100 investors, and liberally use such financial techniques and vehicles as short-selling, swaps, risk arbitrage and derivatives Since they are restricted by law to less than 100 investors, the minimum hedge-fund investment is typically $1 million. (For more information, get the Vault Career Guide to Hedge Funds.) Vault Guide to Finance Interviews The Financial Services Industry Visit the Vault Finance Career Channel at hwww.vault.com/finance — with insider firm profiles, message boards, the Vault Finance Job Board and more. 17 C A R E E R L I B R A R Y
Questions • How would you solve problems if you were from Mars? (Brain teaser 101) • Why wouldn’t I hire you? (The situation is under control… even when it’s not) • A man pushed his car to a hotel and lost his fortune; what happened? • Tell me a joke (No correct answer, but say something racist and you are out) • How many golf balls can fit in a school bus? (Estimation case) • How much should you charge to wash all the windows in Seattle? (WTF?!) • Design an evacuation plan for Denver (Be creative, but logical and specific) • Explain a database in 3 sentences to your 8-year-old nephew • What important truth do very few people agree with you? (The Thiel question) • Which 3 people that you don't know do you admire the most and why? • Andretti: ‘If everything seems under control, you're not going fast enough’
Questions • A dwarf-killing giant lines up 10 dwarfs from shortest to tallest. Each dwarf can see all the shortest dwarfs in front of him, but cannot see the dwarfs behind himself. The giant randomly puts a white or black hat on each dwarf. No dwarf can see their own hat. The giant tells all the dwarfs that he will ask each dwarf, starting with the tallest, for the color of his hat. If the dwarf answers incorrectly, the giant will kill the dwarf. Each dwarf can hear the previous answers, but cannot hear when a dwarf is killed. The dwarves are given an opportunity to collude before the hats are distributed. What strategy should be used to kill the fewest dwarfs, and what is the minimum number of dwarfs that can be saved with this strategy?
Hiring Policy • Emergent leadership, employees take leadership roles in a team when appropriate and then step back and let someone else lead • The ability to pull together disparate pieces of information on the fly (creativity) • The humility to accept the better ideas of others and to take a strong position but then change in the face of new facts • Ownership of work and projects (responsibility) • Expertise, because habitual practice and experience mean simpler answers
Consulting Prep: The Problem Solving Test Paper-based test required for all applicants before in-person interviews ¤ Reading facts: Ability to understand the facts (chart analysis & fast calculations) • Which can be concluded from Exhibit 1? Which formulae calculates the output? ¤ Word problem: Quantitative business questions, requires paper calculations • What % increase is required in order to make purchasing financially beneficial? ¤ Root-cause reason: Gives you a set of data, asks to identify the causing reason • Which of the following points is not a valid reason for the data? ¤ Fact-based conclusion: Draw logical conclusions based on facts (reasoning skills) • Which of the following statements can be concluded from the description? ¤ Client interpretation: Ability to interpret client’s messages conveyed in the case • Which of the following statements best summarizes CEO’s concerns?
Consulting Prep: The Problem Solving Test Practice is good, but it’s only effective when you understand the core concepts 1. Get the fundamentals, case interview is a science (it can be studied) 2. See cases and relate back to the fundamentals, deeply embedded on your mind 3. Good sense of business intuition (gain it through experience and exposure) 4. Better math leads to a better case performance, keep practicing 5. It’s not just about how smart you are, the interview game is also a tactical one 6. Skills & knowledge mean nothing unless they become habits, thinking process
Business School: Basic Interview Tips The 4 major types of cases ¤ Estimation case: You have to come up with a guess (NY hot dog consumption?) • Ability to work with incomplete data, make plausible assumptions • Lay out your logic before making assumptions, use round numbers to simplify ¤ Business case: Estimations + General business knowledge (Beijing project?) • Relevant markets and nature of growth, just read the financial press (WSJ/FT) • Review microeconomics and marketing concepts ¤ Game show case: Analytical-creative skills (Why soda cans are cylindrical?) • Ability to reason and support a rational line of thinking, brain teasers ¤ Profit improvement case: Define the nature of costs and revenues (Expansion?) • Profits = (Price – Cost) * Volume
Business School: Basic Interview Tips ¤ Estimation case: How many gallons of ice cream are sold in the US? Estimate the annual demand for bridal dresses in the UK (phone conversation, no paper) ¤ Business case: Cost of snow removal for the city of Minneapolis for this coming winter? How much should you pay for a hot dog vendor in Times Square? A US credit card issuer studies entering Europe, what should the company consider? A beer manufacturer is considering to sell in Mexico, what are the issues? Develop a growth strategy and the optimal internet strategy for an old newspaper ¤ Game show case: Why are the First Class of airplanes in front of the Economy? ¤ Profit improvement : A battery manufacturer (superior lifetime and quality) is experiencing declining sales, how would you approach this issue as a consultant? A steel producer is losing money; they want to know why and what to do about it
Value Chain (Where should we focus our cost reduction efforts?) • Strategy cases on traditional sectors: Primary activities and support activities ¤ Porter’s Five Forces (Do I have a sustainable competitive advantage?) • Indust. analysis: Customers, Suppliers, Ind. Rivalry, New Entrants, Substitutes ¤ BCG Matrix (Which division in our company should we invest in?) • Acquisition analysis: Dog, Question Mark, Cash Cow, Star ¤ Marketing Mix: Four Ps (How do we introduce this new product?) • Model for marketing cases: Product, Price, Production, Place-Distribution ¤ Three Cs (What are my chances in the health technology market?) • Strategy cases involving new opportunities: Company, Customers, Competitors ¤ SWOT (Is Bangkok attractive as a base of operations for Asia?) • Strengths and Weaknesses (Internal), Opportunities and Threats (External)
School: Nailing the Case 1. Listen carefully to the information and write down the question 2. It’s appropriate to ask the interviewer for a minute to collect your thoughts 3. Ask relevant questions (candidate-drive cases vs. interviewer-drive cases) 4. State your immediate assumptions and structure of analysis 5. Pursue paths with a mix of statements and questions to identify issues 6. After drilling down all paths, summarize the key learning and relate back 7. Identify all the major issues and try to offer recommendations 8. Be sensitive to the ramifications of your recommendations (KPMG 2011) 9. Summarize, summarize, summarize… always refer back to the question 10. Try to have fun and remain energized (don't play the odds, play the man)
School of Business: Plan of Attack ¤ Understand the question… if not, ask for more information • There’s nothing worse than a brilliant analysis on the wrong issue ¤ You understood the question, now choose your framework • Stuck to models that you know well • Don’t state the model: Rule exception for ‘more communication is always good’ ¤ Analyze the case (the meat of the matter) • Communicate your thought process through the whole interview • Be willing to change track/framework, you might get points for being flexible ¤ Arrive at the conclusion—based on your analysis • Recommendations: Concrete actions more impressive than vague strategies • Common sense: Make a sanity check, does this answer makes sense?
Guidelines 1. State the problem… usually done (not always) by the interviewer 2. Disaggregate the issues, structure the analysis with a framework 3. Eliminate all non-key issues (Mutually Exclusive, Collectively Exhaustive) 4. Conduct critical thinking, alternating between data and hypothesis 5. Synthetize findings (framework reinforcement) and build argument Checklist for interviewers ¤ Logical structuring: Has the interviewer identified main issues of the case? Has he structured the problem solving process logically? Has he forgotten items which could have a major impact? Has he generated creative and compelling arguments? ¤ Business judgment: Does he lose time in peripheral details? Does the analysis suggested reflect solid business sense? Does he go beyond solving the case?
Business School: Basic Interview Tips 1. Watch the time and pace yourself, the case portion usually takes 10-30 minutes 2. Digest the information and compose your thoughts, restate the question 3. Some interviewers open the case with one line and expect you to ask 4. Outline framework: Break down complex problems into manageable portions 5. State your assumptions explicitly (it’s about the process, not the conclusion) 6. Ask questions (look for hips) and summarize your points frequently 7. Identify and verbalize all alternatives, don’t get fixated on a familiar topic 8. Check your recommendations and align it with corporate goals 9. If you get lost, pause and regroup, prove you can handle adversity/ambiguity 10. Keep calm, enjoy yourself, don’t forget to smile and hold a decent conversation
Business School ¤ Prior to the interview, make sure time is on your side • Evaluate your worth, show evidence of why you deserve the required salary • Decide the minimum salary that you are willing to take (Tsipras & BATNA) • Determine the strength of your negotiating position, know where you are • Don’t discuss compensation until you have an offer • If asked for requirements in a job application, write ‘negotiable’ ¤ Accepting the offer • Be flexible, forget about the salary and consider the offer if it’s a good move • Be aware of when you’ve achieved a fair deal, don’t look greedy/unreasonable • Get the final offer in writing and be wary of organizations that refuse to do this • Do not accept but then back out of it if you receive a better offer
Business School ¤ The negotiation process • It’s best to avoid mentioning salary until the employer raises the question • Once you receive an offer, take time to think it over before negotiating • Conduct negotiations in a courteous, professional manner • Do not discuss personal financial concerns with the employer • Be prepared to offer detail about previous salaries, don't inflate your earnings • If you’re changing careers or entering the market, research salaries in the field • If you are attempting to ask for more, highlight transferable skills • Anchor: Ask for a high salary (within reasonable limits) to gain the counteroffer • Negotiate on the basis of qualifications and experience as well as factors like demand for your skills, organization’s profit. and urgency in filling the position
Rules for Negotiating a Job (Deepak Malhotra) 1. Don’t underestimate the importance of likability (key: remembering names) 2. Help them understand why you deserve what you’re requesting 3. Make it clear they can get you; 4. Understand the person across the table 5. Understand their constraints (confidence is good, facts on your side are better) 6. Be prepared for tough questions; 7. Consider the whole deal 8. Focus on the questioner’s intent, not the question 9. Negotiate multiple issues simultaneously; 10. Don’t negotiate just to negotiate 11. Think through the timing of offers; 12. Stay at the table 13. Avoid, ignore, or downplay ultimatums of any kind 14. Remember, they’re not out to get you; 15. Maintain a sense of perspective
to YES, Negotiating Agreement Without Giving In (Fisher and Ury) 1. Separate the people from the problem 2. Focus on interests, not positions 3. Invent options for mutual gain 4. Insist on using objective criteria (do your homework, know your numbers) 5. Know your BATNA (Best Alternative To Negotiated Agreement)
Management Skills (Whetten & Cameron) ¤ If involved in a dispute, you have multiple options • Power: When in charge, use status to impose your first idea • Rights: Let a third party (a judge—litigation—or arbitrator) decide who is right • Interests: Try to negotiate an agreement based on mutual needs • Avoidance: Withdraw from the dispute and let the rival have what they want ¤ Influence strategies to win a negotiation • Retribution: Force others to do what you say (coercion and intimidation) • Reciprocity: Help others want to do what you say (exchange and ingratiation) • Reason: Show others that it makes sense to do what you say (present facts)
of Michigan: Successful Negotiation; Essential Strategies and Skills ¤ Key ideas from this course • In their shoes: Figure out in advance where the other part would like to end up • Do not get lost in the details, focus on the big picture • Be ready for positional bargaining, even after finding mutual gains (larger pie) • Reciprocation is real, we feel the need to repay what someone has given us • Strategies: Relationship building, tell the truth, stretch your goals, sympathy ¤ The 4-stage negotiation process 1. Prepare: Plan your negotiation strategy (positional-based or interest-based) 2. Negotiate: Use key tactics for success (find their BATNA, information = power) 3. Close: Create a contract (‘the palest ink is better than the best memory’) 4. Perform and evaluate: Finish the game (define, measure, analyze and improve)
fast, kill doubts… and let them know where you are going • Always know what you’re going to say, never know how you’re going to say it • Openings: Tell a story, that’s what they will remember (sense of humor?) • Use gestures to highlight your points, move your hands (static vs. hyperactive) • Confidence: Stand tall, good eye contact, breath naturally, effective pacing 2. Core: Unpack the claim priming the evidence, from details to key ideas • Balance: Hierarchical structure with smooth, natural topic transitions • Twitter rule for PPT (140 characters per slide)… use it for emphasis, not theory • Passion: Show me you love the topic, share enthusiasm to engage the public 3. Conclusion: Repeat the important stuff, finish strong (10 seconds summary?) • Napolitano: First idea (Boston Tea Party), last idea (NSA à Boston Tea Party) • Good writing à Good thinking à Good public speaking
Presenter Should Know About People (Susan Weinschenk) 1. Go with 20-minute chunks, the optimal (scientifically proven) attention span 2. Multiple channels, use slides that do not distract your audience from the talk 3. Paralinguistics: Body language and tone (record yourself presenting, adjust) 4. If you’re passionate about your topic, this excitement will be contagious 5. Call to action: At the end, be specific about what you want from your audience
Ruin a Presentation (Nancy Duarte) 1. Take a really long time to explain what your talk is about 2. Speak slowly and dramatically, orating instead of talking 3. Make sure you subtly let everyone know how important you are 4. Refer to your book repeatedly; even better, quote yourself from it 5. Cram your slides with numerous text bullet points and multiple fonts 6. Use lots of unexplained technical jargon (the curse of knowledge) 7. Don’t bother rehearsing to check how long your talk is running 8. Sound as if you’re reciting your talk from memory 9. Never, ever make eye contact with anyone in the audience 10. Speak at length about the history of your organization and its achievements ‘A speech is like a skirt: long enough to cover the subject, short to create interest’
Guide • Do not be stuffy: Write as anyone would speak in common conversation, pomposity, long-windedness tend to obscure meaning, or reveal the lack of it • Do not be too chatty: Think what you want to say, say it as simply as possible • Do not be hectoring or arrogant: Those who disagree are not necessarily stupid or insane; nobody needs to be described as silly (let your analysis show he is) • Do not be too pleased with yourself: Do not boast of your own cleverness • Do your best to be lucid: Keep complicated constructions to a minimum, each paragraph is a unit of thought (not of length), homogeneous and sequential • Do not be too didactic: Readers will think they are reading a textbook, persuade them through arguments, reasoning and evidence, go easy on shoulds
Orwell) • Never use a metaphor or other figures which you are used to seeing in print • Never use a long word where a short one will do • If it is possible to cut out a word, always cut it out (understatement) • Never use the passive where you can use the active • Never use a difficult word if you can think of an everyday English equivalent • Break any of these rules sooner than say anything outright barbarous
Journalism (George Packer) • Words should not call attention to themselves • Large subjects are best illuminated by small stories • Good writing comes out of passion and taking sides • Know your own biases in order not to be ruled by them • Don’t be afraid to stand alone • Face the facts, and tell the truth
Clearly (Joseph M. William) 1. Distinguish real grammatical rules from folklore 2. Use subjects to name the character’s in your story 3. Use verbs to name their important actions 4. Open your sentences with familiar units of information 5. Begin sentences constituting a passage with consistent topic/subjects 6. Get to the main verb quickly: Avoid long abstract subjects 7. Push new, complex units of information to the end of the sentence 8. Be concise: Cut meaningless and repeated words and obvious implications 9. Control sprawl: Don’t tack more than one subordinate clause onto another 10. Above all, write to others as you would have others write to you
Business School ¤ Random tips on building a powerful, witty introduction • Who you are and what you can do to help this company, sense of purpose • Review job postings and use some of the keywords to describe the ideal job • To leave a lasting, charismatic impression create a brief, original story • Don’t say ‘I want to make the world a better place’ • Reminder: The pitch shouldn’t sound like a pitch ¤ Vision, professional goals (where do you want to be the day you turn 40?) • Sharpen and clarify a career focus, find one user and make him very happy • Focus on your strengths and identify accomplishments from the past • Comparative advantage: What differentiates you from others, relatively • Highlight the unique idea of your offer and close with a request for action
Entrepreneurship: 24 Steps to a Successful Startup (Bill Aulet) 1. Market segmentation; 2. Select a beached market; 3. Build and end user profile 4. Total Addressable Market (TAM) for beached markets; 5. TAM persona profile 6. Full life circle use case; 7. High-level product specification 8. Quantify the value proposition; 9. Identify your next 10 customers 10. Define your core; 11. Chart your competitive position 12. Customer’s decision making; 13. Map the process to acquire a paying customer 14. TAM for follow-on markets; 15. Design a business model; 16. Pricing framework 17. Calculate the Lifetime Value of an acquired customer 18. Map the sales process; 19. Calculate the Customer Acquisition Cost (LTV>CAC) 20. Identify key assumptions; 21. Test key assumptions; 22. Define the MVP 23. Show that the ‘dogs will eat the dog food’; 24. Develop a product plan
a Powerful Personal Brand • Define a career vision, not a career plan… too many factors you can’t control • Life goals (freedom, stability, power, etc.), are they in sync with your vision? • Determine brand attributes (what are you selling?) and potential target • Include all aspects of you as a product (behavior, non-verbal communication) • Proactively manage key aspects of your brand, details make the difference • Develop expertise and start writing, storytelling captures our imagination • Fail fast and often: Get as much feedback as possible, SM works great here • Paying the psychological price, simplicity comes (always) after complexity • How do we make purchasing decisions? Intuition—impulsive—and habit • Customer engagement: People like to feel they are buying, not being sold • Dangers: Not being true to the brand (dishonesty), not filtering, poor content
Personal Branding Lessons from 6 Celebrities 1. Michael Jordan: Legacy, brands last longer than stars (think like a businessman) 2. David Muñoz: Eccentricity and showmanship (‘vanguardia o morir’) 3. Kim Kardashian: Social media, viral content to gain (even bad?) reputation 4. José Carlos Díez: Some experts have no clue… but they speak with confidence 5. Justin Bieber: Cross branding, associate yourself with celebrities (Mayweather) 6. Cristiano Ronaldo: Google yourself, is your name aligned with your values?
School of Business: Marketing 101 • Strong brands make clear promises that are kept over time (feelings & loyalty) • Also: Internal/external alignment, superior product, distinctive customer exp. • Brand elements (tagline, packaging) work in harmony to communicate identity • Customer development: Cross-selling, up-selling, purchasing frequency • But first, you need a positioning statement: Target, differentiation and reference • Targeting consists in evaluating the attractiveness of each segment • Segment metrics: Market size, growth, stability, ease of entry and competition • Divide a market into diff. subsets to attack them with the right Marketing Mix • Tech and globaliz. cracked the product-centric approach, customer-centric now • Changes: Cust. heterogeneity, more inf., cust. lifetime value/cust. referral value • Mindless shoppers estimate value on perception, dollar votes
School of Business: Marketing 101 ¤ 7M advertising framework 1. Markets: Who should I talk to? Who is my first customer? And my second one? 2. Message content: What should I tell them? Positioning, product’s key benefits 3. Mission: What do we intend to achieve? Awareness, knowledge, interest, trial 4. Message design: How should I say it? Creative strategy, advertising campaign 5. Media: How do I reach them? Platform that maximizes my chances of success 6. Money: ’Half spent on advertising is wasted, trouble is I don't know which half’ 7. Measurement: Was it worth it? Fail often to get information, find good metrics ¤ Unstoppable trends in today’s market 1. Democratization in access (edX); 2. Value chain disruption (Dollar Shave Club); 3. Collaborative consumption (Zipcar); 4. Matching of supply and demand (Uber)
Tipping Point: How Little Things Can Make a Big Difference (Gladwell) The law of the few, success of social epidemics is heavily dependent on… • Mavens, the opinion makers; notorious people inside the industry (gurus?) whose views create tendency, they gain knowledge and share it with followers • Salesmen, the persuaders; powerful, energetic people with an indefinable trait that goes beyond what they say, which makes others want to agree with them • Connectors, the information traders; not famous but popular, the kind of people who know a lot of people (bringing the world together), they do not create word-of-mouth but are primarily responsible for expanding the epidemic
7 Criteria of a Stand-out-name (Marty Neumeier) 1. Distinctiveness: The best names have the presence of a proper noun (Google) 2. Brevity: Is it short enough to be easily recalled and used? 3. Appropriateness: Is there a reasonable fit with your business purpose? 4. Easy spelling and pronunciation: A name shouldn’t turn into a spelling contest 5. Likability: Is it intellectually stimulating? Do you love it? 6. Extendability: Great names offer endless opportunities for brandplay 7. Protectability: Is it available (GoDaddy.com)? Can it be trademarked?
• Design and content, essentially, all you need before launching your website • Understand the product you are selling, adapt message and style accordingly • Quality is relevant, how well you communicate (specially without text) is key • Synthesize to gain clarity, too much content = where’s the important stuff? • Impactful (but coherent) structure/link, too much emphasis = no emphasis • Mobile first, how does it all look in your smartphone? • You’ll get the SEO by defining a powerful brand, not by using stupid headlines • Create a narrative and always be consistent, check for efficiency (A/B testing) • Close with a call to action, what are your expectations in our new relationship? • Great websites, google these cases: Umair Haque, Paul Jarvis, Albert Barqué • And terrible websites: Alfonso Alcántara, Omar de la Fuente, Carles Lombarte
• Target: Find a niche on your comparative advantage, smart differentiation • Influence: Listen to all social media marketing gurus; then, do the opposite • Platform: Hosting (web or blog) + Social media (preferably Twitter/Instagram) • Content: Never hide—you came here to win trust, not to make lots of friends • Timing: Ignore the hot topic—already going late—and anticipate the new trend • Community: Real followers… and haters (don’t ask for engagement… earn it) • Extravagance: The 21st century econ. is not a place for 20th century moderates • Authenticity: Post original ideas, no more Einstein/Churchill/Gandhi quotes • Personality: Define a style, nail the presentation and care about design
1. Do not tweet strategically: Tweet whatever you want whenever you feel it 2. Do not use hashtags: 1 # signals lack of friends, 2 or more # signals stupidity 3. Do not follow 1.000 people: What’s wrong with you? Had no friends in school? 4. Do not say ‘Thanks for the follow’: You had no friends in school 5. Do not follow-back: 7.000 followers but no one cares about you 6. Do not #FF: ‘Well, let's not start sucking each others dicks quite yet’ 7. Do not start discussions with strangers: Life’s too short to argue with a troll 8. Do not jump into conversations: Make a point (if relevant) and leave 9. Do not say ‘Please RT’: Respect yourself… if you need affection, call your mom 10. Do not RT manually: I know you gain visibility but I’ll go after your family
11. Do not be over-optimistic: No matter how hard you try, your day-to-day sucks 12. Do not be rude: Avoid unnecessary conflicts, think about the digital footprint 13. Do not be too polite: Controlled aggressiveness, good girls like bad boys 14. Do not shorten hyperlinks: No need to write 140 characters every time 15. Do not create professional content (eBooks): If you do, ask for feedback 16. Do not use metrics: You already know if you are winning or losing 17. Do not replicate models: Those who fail in the market become SM experts 18. Do not copy ideas/tweets: Some live under the illusion of being an influencer 19. Do not follow marketing freaks: Real influence is about long-term relationships 20. Do not pay 5K€ for training: I’ve summarized all you need to know in 4 slides
‘People are rational: They know their preferences, efficiently process all information relevant to a financial decision and calculate the expected value of any gamble based on the objective odds, not the emotions associated with it’ FALSE • Illusion of agency, you choose on the basis of past inf. and present environment • Choice architecture: Decisions influenced by how these choices are presented • A.k.a. marketing, process automatization… don’t trust your instincts, System 1 • Price policy: Equal prices simplify the decision (iTunes), lower chance of regret • Default situation (status quo bias), tendency for not changing the equilibrium • Individual biases can be reduced—even neutralized—at the organization level • More likely to save when: require opt-out, provide simple and easy choices • ‘Experimentation over storytelling, experience-clinical knowledge over theories’
Success (internal fact. à talent), failure (external à bad luck) • ‘Nobody accepts randomness in his own success, only in his failures’ • Illusion of superiority: Overestimate personal abilities relative to other people • 93% Americans believe they’re an above average driver, statistically impossible • Most and least successful share the same trait: To think they are never wrong ¤ Availability bias: Overweight of recent (or viral) events in the final valuation • Preferences often undefined, value constructed through arbitrary influences • Representativeness, we look for data patterns (hot-hand and gambler’s fallacy) • Wrong estimations: War on terror after 9/11 and shark attacks in Tarragona ¤ Hindsight bias: Ex post inclination to see events as predictable, even wild ones • New information must support pre-existing theories (‘A toro pasado…’) • Making sense of a complex world, I don’t like things that can’t be explained
evaluate prices relatively, by adjusting away from the anchor • The anchor (first piece of inform. received) harms objective value estimation • Milwaukee population? Chicago resident (3M/3), Green Bay resident (100K*3) • A deliberate starting point sets the standard, iPhone 1 (600€ à 400€) ¤ Endowment effect: Ex post (purchasing) expectations, lower willingness to sell • You don’t like A over B because A is better, you just like your first choice (A) • Selling price for football supporters goes up to 3K€ in big events… real value? • That’s why guarantees work, difficult to give back after a few days owning it ¤ Sunk cost: Non-influential cost—since it can't be recovered—we still consider • Holding on to losing stock, hoping it will go up in the future (stop-loss order) • Marriage mistake may be obvious but we don’t want to admit we were wrong • No solution if we keep denying it, good to be humble to save money and time
Risk: Fear to uncertainty (10.000 years ago, danger = death), maladapted brain • Loss aversion: ‘I hate to lose more than I love to win’ (2.5 times more, estim.) • Illusion of control: Bigger threats by artificially avoiding risk (QE), black swans ¤ Long run: Optimal to think l/t, difficult to execute with a carpe diem mentality • Time inconsistency: We act irrationally but we can fight it (gym vs. sleeping) • Self-control (New Year’s resolution) vs. commitment devices (Ulysses, AJ44) ¤ Outsiders: Hunter-gatherer society was a close group, 100-150 maximum size • Small tribal societies with few alternative sellers, no friendly visitors (racism) ¤ Herding: Instinct to mimic group’s behavior, lemmings’ illusion of protection • Bubbles: ‘Buying a 40m2 flat for 300K€ made no sense… but my friend told me’ • Life is easier if wrong with the herd, you won’t get ﬁred for buying IBM
from the herd. And Taleb's cantankerousness, his propensity for picking fights, and for taking stands does also seem to be the source of his greatest triumphs. It was horrible, though, he says: “Between 2004 and 2008 were the worst years of my life. Everybody thought I was an idiot. And I knew that. But at the same time I couldn't change my mind to fit in. So you have this dilemma: My behaviour isn't impacted by what people think of me, but I have the pain of it. People made fun of me. I don't know if you can still find it on the web but you would not believe how much crap was written about me.” Nassim Nicholas Taleb
that Big Decision… (Kahneman & Lovallo & Sibony) 1. Any reason to suspect errors driven by self-interest? (Yes, everyone is biased) 2. Have you fallen in love with your recommendation? (Your kids are prettier) 3. Dissenting opinions within the team? (Absence of criticism? Sound the alarm) 4. Is the diagnosis influenced by analogies? (Saliency bias, past success stories) 5. Have credible alternatives been considered? (Make people submit at least 1-2) 6. If you had to make this decision in a year, what information would you want? 7. Where data came from? (Anchoring, the current trend may not continue) 8. Is there a halo effect? (Attribute success—or failure—of firms to their leaders) 9. Are the people making a recommend. attached to past decisions? (Sunk cost) 10. Is the base case optimistic? (Planning fallacy) 11. Is the worst case bad enough? 12. Is the recommending team overly cautious? (Loss aversion)
Economics (Gregory Mankiw) • Supply and demand ¤ Freakonomics (Steven Levitt and Stephen Dubner) • Study of incentives: Prostitutes, drug dealers, terrorists… economic agents • Gary Becker and the cost-benefit analysis, no such thing as a free lunch • Unintended consequences: Snakes in Delhi, quake in L’Aquila, PAH in BCN • Economic problem: Upside not always exposed to downside, skin in the game ¤ Thinking, Fast and Slow (Daniel Kahneman) • Homo economicus vs. behavioral economics, irrationality and heuristics • System 1 (intuition, fast) / System 2 (consciousness, slow) / Kirk & Spock • Remembering self (nostalgia) and expectations, but what about the present? • Illusion of understanding, we prefer easy stories (good guys vs. bad guys)
Street Journal, Financial Times, The Economist and Bloomberg • Follow the news, daily ¤ The Signal and the Noise (Nate Silver) • Correlation and causation: Married men report to be happier than singles, but… • Wisdom of crowds? Think probabilistically (Bayesian, conditional estimations) • Monty Hall problem, primitive instincts… gut feeling? Models + Intuition • Oversimplification in macro models, what you don’t know can hurt you • ‘Convictions are more dangerous enemies of truth than lies’ Nietzsche • Fragile systems seek to eliminate variability, pursuing illusions of control • Big Data means noise (Thanksgiving turkeys), identify signal by trial-and-error ¤ Excel, R and Stata • YouTube tutorials, or just delegate (I’m an economist, I believe in specialization)
a man in your position, how do you evaluate the risk of not doing something? The risk of potentially letting Bin Laden slip through your fingers? That is a fascinating question. —George, Zero Dark Thirty There are known knowns; there are things that we know that we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns, the ones we don't know we don't know. —Donald Rumsfeld, United States Secretary of Defense
(Peter Thiel) • All failed companies are alike, they replicate and fail to escape competition • Recognize competition as a destructive force instead of a sign of value • When in a fight, strike hard and end the confrontation quickly • Customers don’t care unless you solve a particular problem in a superior way • Every successful company is successful in its own way (unique proposal) • Monopoly characteristics: Technology, network effects, econ. of scale, branding • Last-mover advantage: Make the last great development in a specific market • Start small (don’t disrupt) and monopolize; once you dominate, expand • VC returns are not normally distributed, few companies outperform all others • Pursuit of the very few that can become giants, diversification is for losers • Every company in a portfolio must have the potential to succeed at vast scale
(Peter Thiel) ¤ Nail these 7 questions and you will succeed 1. The engineering Q: Can you create breakthrough technology? (not 10% but x20) 2. The timing Q: Is now the right time to start your particular business? 3. The monopoly Q: Are you starting with a big share of a small market? 4. The people Q: Do you have the right team? (extreme individ. well coordinated) 5. The distribution Q: Do you have a way to deliver your product efficiently? 6. The durability Q: Will your position be defensible 20 years into the future? 7. The secret Q: Have you identified a unique opportunity that others don’t see? ¤ Lessons from the dot-com bubble crash 1. Make incremental advances, small steps; 2. Planning is arrogant and inflexible; 3. Improve on the competition, existing markets; 4. Focus on the product, not sales
Story of Israel’s Economic Miracle (Senor & Singer) • Culture of failure (responsibility, you have to be accountable of your mistakes) • Encouraging creativity and critical thinking… while respecting the hierarchy • Chutzpah (Jewish word for ‘guts’), the courage to say things shocking to others • War zone: Israel is a country surrounded by enemies, no time for caution • The mentality of the Spanish elders, they never took anything for granted • Jews and networking • We are products of our environment: Public strategies, VC, education system • Conventional explanation for Jewish success is the literate, intellectual culture • Gladwell argues it is the savvy you get from watching your family work hard • And the idea (values) that if you pay the price you are going to get the money • Only in environments with a direct correlation between effort and reward
Entrepreneurs Learned from Steve Jobs (Guy Kawasaki) 1. Experts are useless: You’ll have to figure it out for yourself, don't rely on others 2. Customers don’t know: ‘If I had asked, they’d have said faster horses’ H. Ford 3. Challenges beget the best work: Don't back down from dangerous situations 4. Design counts: Great design is the premium for your product 5. Big graphics, big font (presentations): Tighten up the message and engage 6. Jump curves, not better sameness: Launch a product/service 10 times better 7. ‘Work’ or ‘Doesn't work’ is all that matters: Adjust, be flexible when needed 8. Value is different from price: Customers will pay for high quality… perception 9. A players hire A players: Preventing the bozo explosion, find smarter people 10. Trial-and-error, entrepreneurs ship: If it works, accelerate; if it doesn’t, correct 11. Things need to be believed to be seen: If you wait for proof, it’ll never happen
(Eric Ries) • Start: An entrepreneur creates a new products under uncertainty • Define: Innovation is a bottom-up, decentralized process, but it can be managed • Leap: MVP is not the product but a learning activity to test the leap-of-faith • Experiment: Identify the assumptions and figure out ways to test them • Test: First challenge, test assumptions systematically; second, rigorous testing • Measure: Innovation accounting (set up milestones and prioritize work) • Learn: Everything you do is designed to achieve validated learning, testing • Pivot: Acknowledging failure it’s always painful… but it must be done • Batch: Build an organization as adaptable and fast as the challenges it faces • Grow: (1) Side effect of product usage, (2) word-of-mouth and (3) advertising • Innovate: Scarce but secure resources, independ. authority and personal stake
Corporate Job for My Startup F*cked My Life Up (Ali Mese) ‘Meaningful work = Autonomy + Complexity + Effort and reward connection’ 1. Are you ready for social pressure? Stop trying to prove that you are successful You are no more than a seconds of attention other people give to a Facebook status 2. Are you single or do you have an extremely supportive partner? …or family Starting your own business is tough, way tougher than I could have ever imagined 3. Do you have enough cash to last at least a year? Good, multiply it by 3 Success will come slowly and cash will burn fast, be smart and plan from day one 4. Are you ready to sleep only few hours a day? The 4-hour work week is a myth ‘Entrepreneurs work 80 hours a week to avoid working 40 hours a week’ Greiner 5. How do you define success? Money and public recognition shouldn’t be on top Taoists have a saying: The journey is the reward (not the having, it's the getting)
Money ¤ My three noble truths 1. Minimize obligations: No debt, more freedom means more opportunities 2. Maximize learning: Smart, non-material investments (Education + Travel) 3. Optimize risk: Build an antifragile career portfolio—embrace global uncertainty ¤ Money buys time and freedom, but… • Amancio: 78 years old and $65.6B net worth; You: Twentysomething and €1K • Forever young? Time, most valuable resource • Overnight success is a myth, forget about long-term results and focus on days • Financial freedom is not about getting right one big choice (values and habits) • Fuck you position à Trial-and-error, timing ('I’d rather be lucky than good’)
world knows what to do: You get a house with a 25 year roof, an indestructible Jap-economy shitbox, you put the rest into the system at 3 to 5 percent to pay your taxes and that's your base, get me? That's your fortress of fucking solitude. That puts you, for the rest of your life, at a level of fuck you. Somebody wants you to do something, fuck you. Boss pisses you off, fuck you! Own your house. Have a couple bucks in the bank. Don't drink. That's all I have to say to anybody on any social level. Did your grandfather take risks? I guarantee he did it from a position of fuck you. A wise man's life is based around fuck you.
on Stocks (A Random Walk Down Wall Street) • Firm-foundation theory: Find companies with a sustainable compet. advantage • Chart pattern are useless, short-run changes in prices can’t be predicted • Castle-in-the-air theory (greater fool): Value? Analyze how the crowd will behave • But irrational exuberance will eventually end: South Sea, Tulipomania, Internet • Combining fundamentals (firm and industry) with technical analysis • Systematic risk can’t be eliminated through diversification, understand beta • Stock price = Exp. Growth + Exp. Dividend + Exp. Interest rates + Level of risk • Let the Yield on your cash reserve keep pace with inflation: Gold, collectibles • Long-run returns on real estate (location, location, location), own your home • S&P 500 index beat 2/3 of professional managed portfolios during 1980-1990 • Instead of trying to pick the stock winners, pick the best investment bankers
on Stocks (A Random Walk Down Wall Street) ¤ 4 asset allocation principles 1. Risk and return positively correlated (not linearly but exponentially) 2. The longer the investment horizon, the lower the risk… buy yourself some time 3. Operating expenses: Dollar-cost averaging techniques reduce risk and fees 4. You must distinguish between your attitude toward and your capacity for risk (Find your risk-tolerant level—or sleeping point: If under 40, aggressive portfolio) ¤ 4 rules for picking stock 1. Purchases stock that appear able to sustain earnings/growth for at least 5 years 2. Never pay for a stock that can’t be reasonably justified by its fundamentals 3. Buy stocks that can lead to castles in air, attractive prospects with a good story 4. Trade as little as possible… but do not hold on to losing stock (sunk cost)
Building Wealth (Rich Dad, Poor Dad) • Lack of ambition and bad spending habits, obstacles to financial independence • Customer value proposition: Free yourself from the rat race, pointless pursuit • Problem #1: The system trains people to be good employees, not employers • Savings are for investing/creating money, not for paying monthly bill • Are you pursuing a higher salary? It’s ok as long as you have a true reason • Easier said than done… spending habits should turn into investing habits • Poor have day-to-day expenses, rich build wealth on income-generating assets • Practice self-discipline by keeping expen. low (no need to upgrade your iPhone) • Daily reminder: Things you own end up owning you… don’t buy impulsively • Expensive stuff? The rich buy luxuries last, the poor buy luxuries first • You should only purchase things that are beautiful, or things that are useful
Make You Happy (Dunn & Gilbert & Wilson) 1. Buy experiences instead of things 2. Help others instead of yourself 3. Buy many small pleasures instead of few big ones 4. Buy less insurance 5. Pay now and consume later 6. Think about what you're not thinking about 7. Beware of comparison shopping 8. Follow the herd instead of your head
to Challenge Consumerism in Your Life (Joshua Becker) 1. Stop and reevaluate: Your paycheck should not determine your spending 2. Stop copying: Replication, to chase things without a reason 3. Understand your weaknesses: Have your possessions become a burden? 4. Look into your motivations: Advertisers appeal to deep desires, be cautious 5. Seek contribution with your life: Usefulness in your purchases 6. Count the hidden cost: ‘The real price is the amount of life you exchange for it’ 7. Test your limits: Break the cycle with a 30 day no-shopping challenge 8. Give more things away: Your life will feel lighter and the world will be better 9. Do more of what makes you happy: Fight Club, you are not your job
Denial of the self (emotions are not you), no permanent essence survives death • Not to be governed by thoughts, mind creates the illusion of a distinctive me • Buddha preaches mindfulness: Nonjudgmental, present-centered awareness • Irrational craving, we don’t need 90% things we buy (short-term satisfaction) • Pleasure vanishes so we keep pursuing it—extinguish desire to reach nirvana • Never follow the money (from Wall St. to Silicon Valley), create disinterestedly ¤ The four noble truths 1. Life is dukkha (it means, suffering, unsatisfactoriness) 2. Origin of dukkha (attachment to possessions, craving) 3. Cessation of dukkha (liberation, abandoning attachment) 4. Path leading to the cessation of dukkha (the noble eightfold path, nirvana)
We became too self aware, nature created an aspect of nature separate from itself. We are creatures that should not exist by natural law. We are things that labor under the illusion of having a self, a secretion of sensory, experience, and feeling, programmed with total assurance that we are each somebody, when, in fact, everybody is nobody.
Skills • Critical thinking (always be skeptical): New questions, not old answers • School is not anymore about acquiring information but learning how to think • ‘Observation, not age, brings wisdom’ (be curious, iPhone voice memos) • Also, learning how to write (structural thinking) and how to speak (visibility) • More factors outside the bubble: Dealing with failure and success, globalization • Play your emotions: Read the situation, identify when to overreact/underreact • Office survival kit: With deadlines, under-promise & over-deliver • Market success it’s about forecasting… first, try to understand the present • Good to be humble: Not-invented-here bias, look at your work as an outsider • Emotional intelligence: Know what to say, when to say it and how to say it • Self-assessment is key for success (positive feedback is shit, ask for criticism)
Not Taught in College • Thiel and monopolies: Forget about weaknesses, keep improving strengths • Surround yourself with ‘sexy’ people, avoid getting stuck on a losing project • Be flexible on your dreams (anti-romantic, I know), master the art of quitting • Daniel Pink: To sell is human (‘pick up the phone and start dialing’) • Look for a demanding boss, convince her (with actions) to be your mentor • On negotiation: If time is on your side, you will get the deal… networking • Gladwell: Break the rules when underdog, start as a big fish in a small pond • ‘If you’re offered a seat on a rocket ship, you don’t ask what seat’ • ‘Never work for a company old/large enough to pay for naming a stadium’ • Commencement speech (passion & risk): Formula for success… also for failure • You will feel more regret over a mistake of action than a mistake of inaction
from Levitt & Dubner on Rationality (Freakonomics) • Don’t undervalue the opportunity cost of your time… delegate, spend your brain power on what you love and get smart people do the work for you • Think like a child: Have fun, go for small problems, don’t fear the obvious • Admit you don’t know everything… don’t assume a level of knowledge you don’t have (don’t be THAT guy who gives advice outside his area of expertise) • Persuade people who don’t want to be persuaded • Put away your moral compass—because it’s hard to see a problem clearly if you’ve already decided what to do about it • Learning advice from the podcast: (1) Do not blame your tools, (2) be willing to learn from everything and everybody and (3) know your audience • Appreciate the upside of quitting and say ‘I don’t know’ more often
In for Graduates (Sheryl Sandberg) • Men credit success to innate qualities, women to luck (external) and hard work • Men apply for jobs if they meet 60% of the requirement, women close to 100% • Men are promoted based on potential, women on past accomplishments • Society is not helping, clichés like ‘bossy’ (mandona) are going to be out there • Success and likeability go hand-in-hand for men, mutually exclusive for women • Sandberg’s book focuses on the internal obstacles, the things you can control • Ignore the noise, Generation Y will get rid of all this silly stereotypes • Don’t leave before you leave, don’t plan ahead on future husbands/maternity • Make your partner a real partner, split child and family care duties 50-50 • Fake it until you make it, sit at the table…what would I do if I wasn’t afraid? • It all comes down to self-confidence (higher positions, learning scenarios)
Why Some People Have It and Others Don’t (Jeffrey Pfeffer) • People like to feel good about themselves, self-handicapping their chances • They think that if they behave appropriately, things will take care of themselves • Just-world hypothesis: You follow the rules, you get a reward…FALSE! • Your boss is probably not worrying about your career, neither your coworkers • Biggest obstacle to success is not [the lack of] talent or motivation but the fact that you are in the wrong place… be brutally honest about strengths & preferences • Networking does not take that much time & effort, it takes thought & planning • Watch those around you who are succeeding, what’s so different about them? • We want to associate ourselves with winners, delineate elements for your brand • Understand the organizational dynamics—how different people perceive things • Authority is 80% taken, 20% given: Ask for things and learn to stand out
Secrets of the Trappist Monks (August Turak) • Most companies fail because their vision is too small… or too ambiguous • CEOs are so busy getting things done that they forget why are they doing it • But leadership is about providing a mission, a true reason • Millennials are looking for something more than € and titles, self-transcendence • Marines sacrifice for a sense of community bigger than the sum of individuals • Team management: Set the expectations and build passion among employees • ‘When taking a new job, hire somebody, fire somebody, rearrange the furniture’ • Goat rodeos and the transformational organization, push your team to the limit • Zen advice: What made me successful was not what I did but what I didn’t do • Write down every promise you make, no matter how trivial • No one can keep all promises, but you always have to communicate effectively
Secrets of the Trappist Monks (August Turak) • How all these decisions affect my personal brand? Become trustworthy, reliable • Intangibles: A reputation for integrity, culture of excellence, selfless service • Authenticity comes from self-knowledge… but, do you really want to know? • The Q: Where am I wasting my life? Easy thing to do is to never think about it • Self-help books are a waste of time, no easy answers in your career path • Nowhere to hide, understand who you are and you will know the Gods • Hero’s stages: The call, resistance, the desert, the trial, death & rebirth, return • Focus on principles (values and attitudes) rather than content (skills) • Dharma (the right way): Conduct, meditation, wisdom, freedom, understanding • In Zen they say: ‘If something is boring after two minutes, try it for four’ • Life must be lived forward… trust the process and know your code
Psychology (Tal Ben-Sahar) • Don’t let your happiness be controlled by something you can’t control • No one is coming, take responsibility for your happiness (no rumination) • Everyone suffers setbacks, it’s about how you readapt… focus on the good stuff • To create lasting change build habits and be grateful, do not take life for granted • Give yourself permission to be human, do not shut down your emotions • PTSD in Vietnam war vets, they were not allowed to talk about the experience • The mind doesn’t like incongruences (inside ≠ outside), insecurities are loud • Do you want to be happier? Think about the positive, talk about the negative • Resiliency (antifragility), curiosity (ask questions), confidence (faith in a path) • Learn to fail, maximize personal growth by putting yourself on the line • Self-fulfilling prophecy: Questions begin a quest, actions affect your mood
Psychology (Tal Ben-Sahar) • How would I live my life if nobody had expectations on me? No more rat racers • Take time to reflect about your time here, find a career calling • Try new, little things everyday and break down life goals in short-term targets • Deadlines! Best incentive is to make them public, throw your bag over the wall • Mind-body connection: Fitness, meditation, 8-hour sleep, healthy eating, etc. • Buddhism enlightenment, you are not going to get there… but it’s a nice idea • Tal’s schedule: 90’ Sprint (working at 100%) + 15' Recovery (not working at all) • Millennials love multi-tasking… too many distractions, quantity affects quality • About love: Finding vs. cultivating, 94% divorce when expectations are too high • Perfectionism harms relationships, disagreements make relationships stronger • Hollywood unrealistic models, all or nothing? Love me less, love me longer
from Umair Haque on Finding a Purpose «Want purpose? Prepare to be left black and blue—all over, over and over again. Purpose beats you up, it’s a gladiatorial contest between you and the heavyweight champion known as a life that matters. It hurts but you can emerge tougher» 1. Be uncool enough to love ‘God is dead’ Friedrich Nietzsche 2. Head into your heartbreak zone, optimum level of discomfort 'My job is to come up with 365 ideas a year' Bill Watterson (Calvin and Hobbes) 3. Follow the NASCAR principle… introduce stressors, antifragile trial-and-error ‘Character is proport. to N, successive failures without being intimidated’ Taleb 4. Aim for forest, not fireworks ‘The emptier the existence, the noiser it gets’ Josep Pla
Work vs. Hard Work and the Culture of Busyness (Matt Steel) «We’re trained to think that successful people are busy, people who take long vacations are viewed as lazy or untrustworthy… but workaholics aren’t role models, their frantic days are really just a hedge against emptiness» 1. Slow down: Trouble with rat race is that even if you win, you are still a rat 2. Stop trying to be a hero: Commit to a schedule without killing yourself 3. Go home: Leave the office by 6 pm, or earlier if possible 4. Minimize meetings: Some are necessary, often they are time wasters 5. Go dark: Create an atmosphere of minimal distractions, stay offline 6. Leave the office for lunch: Read a book, take a walk, visit a museum… 7. Give up on multitasking: Inefficient, you might go broad but you can’t go deep 8. No: Reject most ideas so you can focus on the important ones, bull’s-eye
from Carl Sagan against Propaganda and Pseudoscience 1. Wherever possible there must be independent confirmation of the facts 2. Encourage debate on the evidence by proponents of all points of view 3. In science there are no authorities; at most, there are experts 4. Spin more than one hypothesis, think of a test you might disprove alternatives 5. Never fall in love with your hypothesis; ask yourself why you like it 6. Have some measure, what is vague/qualitative is open to many explanations 7. If there’s a chain of argument, every link in the chain must work 8. Occam’s Razor: When faced with two equally-good hypot. go with the simpler 9. Always ask whether the hypothesis can be falsified; propositions that are untestable, unfalsifiable are not worth much (must be able to check assertions out)
estudiar Económicas y perder la juventud y la vista en unos libros que no valen para nada. Llevo 42 años pensando que lo que vivía no era importante, porque era como provisional, como si estuviera esperando destino. Yo creía que iba hacia una vida maravillosa, y mientras estaba en la cola esperando, pues trabajaba y estudiaba como un negro porque tenía que ser así, porque más adelante iba a llegar mi vida, mi verdadera vida. ¿Y sabes qué pasa? Pues que ya ha llegado. Y va y no me gusta. Y un día te mueres. Y se te queda esa carita de gilipollas. Porque es que te han llevado al huerto toda la vida y nunca has hecho lo que tú querías. Estudia, échate novia, cásate, cómprate un piso, un chalet, un coche… y trabaja como un burro para pagar las letras, el colegio de los niños, el friegaplatos, la cortadora de césped. Y te das cuenta que has vivido para El Corte Inglés, La Confianza y su puta madre.
el uso, reproducción o divulgación del contenido sin previo consentimiento de la empresa propietaria. Career101 Career 101 es un servicio de orientación profesional para estudiantes y licenciados Propuesta: Gestión de carrera + Procesos de selección + Finanzas personales Materiales gratuitos disponibles en: h"p://joantubau.tumblr.com/career101 Joan Tubau es economista y Profesor Asociado de la Universidad Pompeu Fabra