45th Edition — December 15, 2019
One of the most common complaints I hear from CEOs is that on a day-to-day basis, they seem to have infinite things to do, yet weeks will go by and they don’t feel like they have accomplished anything.Matt Mochary – The Great CEO Within: The Tactical Guide to Company Building
1. $10 Million in Liquid Assets
Finally, a CEO coach who talks about personal finance to his coaching clients in Silicon Valley. Business coach and author Matt Mochary offers the following advice to start-up owners who are building wealth:
- no more than 25% of net worth should be in alternative (illiquid) assets such as the small business a founder owns
- if that’s impossible, seek $10 million of liquid net worth in the form of low-cost index funds
- the next key milestone is $100 million in liquid assets as it eliminates disaster scenario thinking
Mochary prefers brokerage accounts over commercial and investment banks. For index funds, his ideal allocation is 30% for equities, 25% for non-US equities, 15% for real estate, and 30% for treasuries. However, that allocation should be tempered with a person’s given age and risk tolerance.
If you have not read Trillion Dollar Coach by Eric Schmidt, I like Mochary’s book better which is entitled The Great CEO Within. Mochary’s book is far more practical than Schmidt’s which is more of a biographical sketch of the legendary business coach, Bill Campbell.
Still have your mind on that $100 million? Yeah, me too. But I still love my job.
2. Artificial Intelligence – Myth vs. Reality
Netflix recommends movies and TV shows as does Amazon with book titles and other products. Even one of my fantasy football platforms writes weekly summaries similar to the way Jimmy Olsen would probably do so at the Daily Planet.
Each of us has been touched by machine learning or artificial intelligence even in the most subtle ways over the past five years. Still, I’ve been wanting to beef up my AI acumen while separating fact from fiction. Mission accomplished as I wrapped up Janelle Shane’s, You Look Like a Thing and I Love You. Notable takeaways included –
- Neural networks can and do make mistakes – they can be just as biased as people
- There’s a big difference between general AI (think R2-D2) and specific AI (think Netflix recommending movie titles)
- We’re still 20-30 years away from major advancements in general AI
- Programmers have to code AI as narrowly as possible to get the best results
- AI is prone to solving wrong problems that humans need to do themselves (the 2016 autopilot Tesla fatal accident is a case in point)
- AI can be disguised as humans (as in customer service reps) and can route calls to people as complaints escalate (the process is still imperfect)
- AI still needs supervision in highly technological fields
I’m not necessarily giving the book a thumbs up, but if you want a simple and lighthearted read on AI, it’s worthy of a quick skim. There are only 20-something reviews since the book was just released a few weeks ago, but the overall Amazon rating is 4.6.
3. A Few (Possibly) New Business Terms from the Past
I have an odd business fetish. I collect frameworks – I’m pushing nearly 600 pins on my Frameworks board on Pinterest and 11,000 followers are monitoring my shares at the Frameworks Fanatic on Quora’s platform.
So let me throw you some business alphabet soup. When was the last time you heard these terms?
- AoRs – Areas of Responsibility – Rethinking the org chart: Areas of Responsibility is a good read, and you’ll find that this 5-year-old article traces the origin of AoRs back to Apple.
- If you study AoRs, you have to know about DRIs (I’m not telling). You can find the answer at Apple’s Corporate Innovation written in 2011.
- Unrelated to AoRs and DRIs, Bain’s RAPID® decision tool is equally fascinating.
What are your favorite business frameworks, and how do you use them in your daily work?
4. Still Searching for That Perfect Holiday Gift?
I have an idea for you. I just purchased 5 copies for my family (one for me too) of The Five Minute Journal which is a gratitude, happiness, and life planner all in one book. The average Amazon rating is 4.8 on nearly 2,000 votes – remarkable. I’ll start using mine on January 1.
5. Revisiting My Favorite Books of 2019
If I ever meet Tara Westover, I’m giving her a hug. I would thank her for her courage, tenacity, and her ability to escape an isolated and abusive childhood which lead to university studies with no prior formal education. I’m still shaking my head in amazement as I type these words, and it’s been nearly 10 months since I read her memoir, Educated.
Thank You For Reading
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Take care and have a great week. Always be learning.