Books

Unfortunately it's been a while since I listened to this audio book. I don't really recollect the details, I just have a general sense of what it was about. So this post might actually be more about what I made out of "Linchpin", and not what it is really about.

Seth Godin manages to inspire me. He read this audio book himself, and he pours all his heart into it, you can sense it. So...what is a linchpin? Godin defines it as an indispensable person within an organisation. Someone an organization can't work without, just like a real linchpin is indispensable within a complicated mechanical device.



What affected me most was his definition of art, which is quite different to the concept I had in my head. Godin says, an artist strives to create a change in other people by what he or she is doing. I previously thought it was a means of expressing yourself and finding out who you are. This is a huge difference and shook my world. I will keep both concepts and internalize them.

Godin says, for a linchpin life is a piece of art, and an artist cares about everything he or she does. So a linchpin is not indispensable just for the sake of it, not out of fear or strategy, it's a consequence of just being true to oneself. You can't simulate being a linchpin. But you might become a linchpin, as you might be that kind of person, just not having actualized your potential. In this case the book is for you.

An important issue that might hinder you from being a linchpin is your lizard brain: This is the part of your brain that hasn't evolved: It tells us to flee when it senses danger or risk, it triggers fear. I guess everyone has encountered situations where an inner voice told us we should quit. We then rationalize it and don't challenge this impulse. Godin tells us that this part of the brain is hardly of any use any more, as there are no real life threatening dangers any more. Godin tells us to sense danger, but then acknowledge and overcome it. He encourages us that we can achieve anything we dream of.

Linchpins are per se generous, they give gifts. Not in order to get anything back, like in a deal, just for the sake of giving. It's within their nature. For a linchpin, the act giving makes them richer, not poorer. By giving gifts, a linchpin creates a web of other people around him or her.

A linchpin takes action and doesn't wait for orders. A linchpin makes a difference in everything he or she does. Simple as that.

I like Godin's holistic approach, he creates the image of the linchpin, but it's not a check list that you need to go through, it's up to you how to become a linchpin. I definitely recommend this book. I want to be among people who think of their life as art, who are not reasoning and make compromises: These people inspire us and help us become another person. A very inspiring book.

When first hearing about this book, I wondered what a dip was. Godin says, whenever you start working on something new, you go through different phases: At first everything goes smooth because you're learning fast and it's fun. After a while, the dip comes. This is a phase where you hardly make any progress, and most people quit.

If you think the only way to handle a dip is to persevere, you're wrong. Godin's point is, that despite having been conditioned to consider quitting a bad thing to do, it is an essential behaviour if you want to be successful. During a dip, you only have two options: conquering or quitting. There is nothing in between, if you think it's worth it, find a way through, if not, just quit. According to Godin, everything in between is a waste of time.

Although we might think of a dip as an unpleasant thing, it is something that helps us to be successful: If things were easy, everybody could do it. Making it through a dip puts you ahead of competition. We should embrace the dip and welcome the challenge, while keeping in mind why it's worth going through the dip.



Another point Godin makes is this: You should strive to be the best in the world at what you do (world is a flexible term, it could also mean being the best barber in your street). It's like the other end of the long tail: it's the short head. When you are in the short head, you will be rewarded beyond all proportions, as our society adores the best.

In order to become best in the world, you need to choose your dips carefully, and find the right mixture of persevering and quitting. Most people persevere when it's easy, and quit when it gets hard, but Godin tells us that it might be worth quitting although things are easy, or it might pay off to conquer a dip although it is hard.

While I find the metaphor of the dip quite intriguing, I wished Godin had showed some recipes how to find out if a dip was worth conquering or not, or even techniques on how to make it through a dip. But as another reviewer said, "Seth Godin doesn’t claim to have all the answers. But he will teach you how to ask the right questions", at which he succeeds.

Disclaimer: I haven't read the book, but listened to an abridged audiobook version.

I stumbled upon this book via Hans Georg Huber's Twitter channel, Coachingbuero, where he collects links to articles on leadership, management and corporate culture. Although I generally dislike it if people unknown to me suddently start following my Twitter profile (there is a taste of spam to it), in this case it was helpful, and I absolutely recommend Coachingbuero.

The book "Sinnvoll erfolgreich" is a result of the authors' professional life: Both are consultants, they coach managers and leaders, and act as intermediaries between people and companies.



The book is divided into three parts. The first one deals with becoming a leader in your own life, the authors argue that change always begins with oneself. It's about harmonizing one's being and acting, or in other words, inner and outer success. Outer success is basically making a living, and it is necessary in order to achieve inner success, which is creating something which is meaningful to yourself. Someone who lives according to these values would not follow others just for the sake of following, as it would deeply disrupt the balance.

The middle segment is about inspiring people to work in a company. The crucial point here is that the company and the employees are a base for each other's success, again an issue of finding the right balance. If only the companies' success is important, employees will leave and in the long run, the company dies. So it's essential for a company to have values, and even more, to act according to these values. Only then can employees identify with them as if they were their own. With these values, a company becomes meaningful, and give its employees' actions meaning as well.

The last part deals with becoming a leader in the company context. In today's economy it's not really leading in the traditional sense, more like moderating change processes. It's their job to create win-win situations between employees, clients and the company itself, over and over again. The challenge for a leader is to remain authentic and real, which has been described in part one of the book. I especially liked a Chinese saying quoted here, "When winds of change blow, some build walls, others build windmills", and of course we should strive for the latter.

All in all, this book carries an important message, but somehow it sounded all too familiar, and it missed some big bang. Maybe it's because it is written by Germans, and not Americans, who have a way in simplifying and focussing that others rarely possess. So while I recommend the book, and it's a quick read and a rewarding experience in general, it didn't direct me to something really new. But it's a welcome reminder, which will prove to be helpful in day-to-day life.

In various Scrum books I have read, the authors suggested to have slack time in between sprints. As I was quite new to Scrum, I was not familiar with the concept of slack: It came across more as a relaxation period: you can't sprint all the time, and need to regain strength for the next sprint.

But there's more to slack: Tom DeMarco compares it to an open space in an 8-tile puzzle (here's an example of such a puzzle). He recalls the 1990s trend, when organizations rationalized middle management for the sake of efficiency: Using the puzzle metaphor again, this situation would equal a 9-tile puzzle with no open space at all! The result is high efficiency, but change has become impossible: People are just too busy with operational work to think about the future.

Slack is the time when you are 0% busy. You have time to reinvent yourself and experiment. Think about it in a Darwinistic way: If there was no mutation, life could not adapt to changing circumstances. Mutation is slack. Without mutation, every species would be doomed, without slack, your company is probably too.



As I have tried to express in my blog entry about Heraclitus, the only thing permanent now is change. This is why slack is seemingly becoming more and more important. Not only Google is doing it, but many others too. It's not a luxury, not about being nice to your employees, it's about assuring to still be able to compete in the future.

The book consists of four parts, the first introducing the concept of slack, and the second being about the consequences of no slack. In the third part, the author illustrates opportunities that possibly coincide with slack, with the final part being about risk management: It reminded me of an agile guideline, embrace change. After all, without risk everybody could do what your business does.

Summing up, I would definitely recommend the first part of the book. It has some great metaphors and a concise summary of the authors ideas. The rest of the book feels somehow bloated, although interesting thoughts pop up occasionally. But for the first part alone, I recommend it, it has profoundly changed my view on slack.

Funny side note: In the introduction the author says, he has adjusted the book so that an executive could read it during a flight from Amsterdam to Rome. Either he's talking about another Rome on a remote continent, or these executives must be pretty fast readers.

This is the latest business book by the founders of 37signals, who have become famous for creating Ruby on Rails. The tagline, "change the way you work forever", sets the tone for this book, it promises a lot. This seems to be the style of 37signals, they are very good at creating a hype around themselves, similar to Apple. Before I get to the content, I have to say that I am very much annoyed by this behaviour, it's too aggressive and phony for my taste. But their success proves me wrong.



The book is a quick read. It has almost 300 pages, but the font is very large and there are lots of illustrations. I managed to read it in about two hours. The individual chapters consist of essays, which are headlined by a thesis and cover about two pages, and feel like blog posts. Overall, the book consists of about 90 essays.

The language of the book is very clear and straight to the point. There is no beating around the bush, the authors make their points and move on. The key messages are "take initiative" and "focus", it puts the reader in the driving seat, and creates a positive vibe towards work. In this way the book is a success.

One thesis mentioned in this book is "sell your by-products". The authors argue that each company does some work that is not harvested although being potentially valuable. For them, creating books like this is a by-product. The amount of money they make from it proves them right, however this is also the point where it fails: It truly feels like a by-product, it doesn't feel like it has been written by a focussed and passionate person. At some stages it feels redundant, at others it feels artificial. Maybe we have to get used to books like these in times of Twitter.

Nevertheless I managed to take some interesting aspects out of it, I especially liked the essays "Scratch your own itch", "Be a curator", "Say no by default", "The best are everywhere" and "You don't create a culture". Just for these, the book was worth reading. It's not a book I love, and will not change the way I will work forever, but it's a decent book to read and even to revisit later on.

This book stems from a collaboration of various authors affiliated with the Smashing Magazine. It's about best practices in modern web design, covering the following topics: CSS Layouts, User Interface Design, Typography, Usability Principles, Color Theory, Performance Optimization, Increasing Conversion Rates and finally Branding.

The book is a quick read, although it covers more than 200 pages. It's especially efficient if you are new to a topic, but even if you're quite knowledgable in a field, it still has interesting facts. For example, I'm pretty much a CSS agnostic, and the first chapter helped to get a good idea of the several approaches there are (fixed width design, fluid design etc), while the chapter on performance optimization was more or less old news to me, but still lead me to two great tools, Yahoo SmushIt for lossless image optimization and Google PageSpeed for CSS and JS optimization (similar to YSlow).

I was hoping to get some inspiration for designing Mapbender applications, but especially the latter chapters made me think more about the Mapbender project website: we really need to change it A LOT. Maybe the wiki should not be the front page, maybe the core information should be in a CMS like Drupal, with thoughfully assembled high-quality content targeted at specific user profiles, especially potential new users. I think the Mapbender project website is not very helpful at the moment, unless you know how to use it.

What I didn't like about the book is its binding: The margins are very narrow, so you have to bend the book real hard in order to read everything close to the binding. I fear that the pages will start coming loose soon. Apart from this, it's a very recommendable book for a general overview. Maybe I was hoping for more hands on CSS, if you have a book on this, please recommend it to me.

Another thing I found interesting was that shipping to Germany was free, but you could opt in to social shipping to make sure that delivery is affordable to people ordering from remote areas of the globe.

In the past months I have been rather quiet, the reason is that I have dealt intensely with Scrum, an agile management framework. I have been a follower of agile practices in software development, for example XP, and Scrum extends these practices to a larger context. This book is a good introduction to Scrum, as it is written by some of the creators of Scrum, and therefore an original, one of the first to deal with the subject, and furthermore it is very concise, it only weighs about 150 pages.



Scrum has worked extremely well in my (still limited) experience. The most promising aspect is, that people seem to love it. That's one of Scrum's central aspects, it puts people first, just like the Agile Manifesto demands, "Individuals and interactions over processes and tools". With a very small set of strict rules, it takes a lot of the burden of decision making off people and lets them focus on their work.

Wikipedia has a great article on Scrum, explaining it in much greater detail than I could in a blog post. But the following illustration sums it up quite nicely I think.



What I want to do is to give you a few more interesting stops for your Scrum journey.

First of all, a good companion to the book by Schwaber and Beedle is "Scrum and XP from the Trenches" by Henrik Kniberg. The author shares his experience with introducing Scrum at his company of about 40 people. He describes his solutions to the problems he faced, which I found useful in the first sprints I took part. Also a very light weight book, good content but an easy read. Kniberg's company also sells Planning Poker decks at reasonable prices.

There are some excellent lectures on YouTube's GoogleTechTalks channel, like "Scrum Et Al." by Ken Schwaber, or "Self-Organization: The Secret Sauce for Improving your Scrum team" by Scrum co-creator Jeff Sutherland. I find the latter one even more impressive as Sutherland portraits what can be achieved with Scrum if you manage to get a team into hyper-productive state.

At Jeff Sutherland's blog you will also find the Nokia Test, developed by Bas Vodde at said company in 2005 in order to measure how true the implementation of Scrum was to the original concept. You have a set of nine questions, and after a product cycle has completed, each team member is supposed to answer this catalog. From the answers you can compute a number, which indicates the degree to which you have stuck to Scrum. I found this test very useful in a Sprint retrospective I led.

The books by Mike Cohn might also be worth a mention, despite the fact that I haven't read them. I have only taken a glance at "Agile Estimating and Planning", which seems to take a more academic approach, but also his other two books seem to be interesting, "User Stories Applied" and "Succeeding with Agile". His blog is also always worth to subscribe to.

Last but not least, I want to mention the mailing list scrumdevelopment at Yahoo, which is a good reality check as you can read about the challenges people face when introducing Scrum to their environments.

The intriguing premise of The Fifth Discipline is, that a companies' only sustainable competitive advantage is the ability to learn faster than its competitors. Senge names companies who follow this approach "Learning organizations". He makes it clear that you can never actually be a Learning Organization, as it is a neverending process, more a state of mind. Senge identifies five disciplines that help us build the Learning Organization: "Personal mastery", "Mental models", "Building shared vision", "Team learning", and "Systems thinking".



For me, "Personal mastery" is more or less what Stephen Covey describes in his book "Seven Habits of Highly Effective People", you can read my previous blog entry about it. I liked the way Senge says people with a high level of personal mastery approach their life like an artist approaches a work of art. They have intrinsic motivation and are deeply committed to what they do.

"Mental models" are the way we view the world. There is no truth, only our perception of the world. We need to let go of the assumption that what we see is "the truth". Only when we are aware of this we will be able to explore other people's opinions without prejudice. (Thanks to Seven for her toughts on truth).


"Building shared vision" is about forming a collective vision from personal visions. Only a vision has the power to give us long term motivation, it is a picture of a future we seek to create. The challenge is not to dictate a vision, as this will at best lead to compliance. What you want are truly committed people, who truly embrace the shared vision, as it if was their own.

In order to understand "Team learning", you need to be aware of the difference between "dialogue" and "discussion": Dialogue is about exploring a topic, and opening up. You let go of you own mental models, and enter a process of genuine "thinking together". Through dialogue you will be able to see things you would never have seen on your own. In contrast, discussion is a process of decision making, it's a process of weighing arguments, with one argument being the winner. Dialogue is about opening up, discussion about narrowing down. You need to know when to go to dialogue mode, and when to return to discussion mode.

Continuining with "Systems thinking", Senge says that our world view today is fragmented: We are a society that produces specialists, who are used to address a tiny segment of a bigger system they don't have to understand. In computer science we call that paradigma divide-and-conquer. But reassembling the fragments into a whole is a complex process, so we either stop trying or end up with a distorted "big picture". We see the world as a chain of events, not as a complex system that produces these events. So we often find ourselves solving problems by removing the symptoms, without trying to see the system's mechanism that produces these problems.

"Systems thinking" is the fifth discipline, giving the book its title. it incorporates all other disciplines. "Building shared vision" fosters thinking long-term. An understanding of "mental models" helps us to to be willing to see the system, while "team learning" actually helps us to see the system. "Personal mastery" helps us to reflect and see us as part of the system.

After all, a Learning Organization is not something abstract or remote: humans are really learning machines, learning gives us pleasure, it lies in our nature to learn. The concept of a Learning Organization helps us to model an organization after the people who form it, and not vice versa.

Peter M. Senge also wrote the foreword to the book "Sustainability by design", which I reviewed earlier this year. Make sure to get the revised edition from 2006. It contains a lot of real world examples of organizations that applied the techniques mentioned in this book. You can buy a copy here, or lend my copy, just ask.

This book can be categorized as a self-help book. Some people like these kinds of books, others think they are futile. You need to approach this book with an open mind, or else you won't get anything out of it. I try to revisit it about once a year, because I feel it is really helpful. The fact that Covey manages to translate his message into seven well-described habits makes this book so useful in day-to-day work for me. I often find situations where these habits are applicable.

These habits build on each other. Furthermore, the first three and the second three form trilogies, with a seventh habit on top. Here is a short summary of the seven habits:

(1) Be Proactive

Proactive is to be seen in contrast to reactive. We easily feel victimized by circumstances or blame other people for problems, which is reactive. Symptoms of being reactive are frustration, cynicism or boredom. Covey says that the first step is to take responsibility for your actions and start thinking for yourself. Beware, proactivity doesn't equal doing things for the sake of doing things (Aktionismus). This is a shift of mind first, only the other habits tell us what we can do once we have accepted habit one: You have to get in the driver's seat if you really want to make a difference.

(2) Begin with the End in Mind

This habit includes the ability to make plans. Too often our actions are uncoordinated and not thought through. If you know where you're going, you create a vision, and the vision pulls you towards this goal. This habit is valid for short-term goals (Covey recommends a week as a minumum time span) as well as long-term, personal goals. If you think about it, it's not easy to really give a list of your own long-term goals. A common mistake is to state goals negatively: I don't want my back to hurt, I don't want to be stressed anymore, I want to be done with this piece of work. This is a reactive pattern and contradicts habit one. Goals must be positive.

(3) Put First Things First

While habit two is about making the plan, habit three is about following that plan. In other words, this habit tells you how to climb a ladder, while habit two tells you which wall to lean your ladder against. Covey illustrates this habit in a simple matrix



Most of our activity seems to be in the "urgent and important" quadrant (Q1). These things need to be done (as you may have noticed, this is again a reactive pattern). The interesting quadrants are "urgent and not important" (Q3) and "not urgent and important" (Q2): Only activity in Q2 will help us to reduce the workload in Q1 in the long run. As long as Q3 dominates our time not spent in Q1, there will be more crises and more stress. So we need to spend time in Q2 as often as possible, which demands a lot of discipline: A lot of things appear important, although they are not. Q2 also gives you most fun and long-term satisfaction. Spending your time in Q1 and Q3 is the road to burnout. Habit three builds on habits one and two: You must be willing to make a difference and have a plan what you want to change first.

(4) Think Win/Win

While the first trilogy is about yourself, habits four to six deal with relations to other people. Habit four is similar to habit one, as it includes a paradigm shift: Suddenly, there are no more enemies. People who think win/win have an abundance mentality (in contrast to a scarcity mentality), which means that there's plenty (resources) out there for all of us. Covey says that only win/win relationships are long term and thus beneficial. Beware: This habit doesn't just say "be nice to your customers": this would be a lose/win situation. Another point is that you cannot force win/win, so it is good to have a "no deal" alternative to avoid win/lose or lose/win.

(5) Seek First to Understand, Then to be Understood

In the second habit we have established what we determine as "win" for ourselves. Now we need to find out what "win" means to other people. This is a basic requirement for a real conversation. But often, people just seem to say whatever it is they want to say, with no consideration of their counterpart. Imagine business negotiations where you want to sell your product. If you keep on talking about what you have to offer, but do not listen to what the customer really wants, your chances of succeeding are highly reduced. Beware: disagreeing is not contrary to this habit. Being confronted with another opinion gives us the opportunity to reflect and see things from another perspective.

(6) Synergize

This habit is about team work. Habits four and five help us to synergize, to function in teams, where the whole is bigger than the sum of its parts. Being part of a great team is one of the greatest things we can achieve in life. Now you can achieve things that you can't achieve on your own. A real team is an extension of our own self. Where the first trilogy is about being "indepent", meaning being responsible for yourself, this habit implies being "interdependent".

(7) Sharpen the Saw

This habit is keeping it all together: leading a balanced life which allows us to implement the previous habits. This includes regular physical exercise as well as sharpening the mind by reading or writing.

What is sustainability? The author, John R. Ehrenfeld, defines it as

the possibility that humans and other life will flourish on the Earth forever

and explains his interpretation of each word in great detail. That's what he does in general, his descriptions and definitions are both precise and concise, and he always takes the time to share the etymology of each term with us.

Sustainability is not just about the environment or "saving the planet". Ehrenfeld explains how humans have alienated themselves from nature und by this picked up habits that lead to unsustainability. He describes two basic system archetypes of behaviour, "fixes that fail" and "shifting the burden".

Almost all human problems are solved by a quick technological fix (humans nowadays are overly optimistic about technology), which most likely has side effects, which in the long term lead to unsustainability, and thus fail. We must acknowledge that nature is a very complex thing, and that technological solutions tend to fail.

Humans also tend to concentrate on the symptoms only, and by this don't search for a long-lasting solution. We shift the burden to a habitual solution. An example could be consumption, which detracts us from our unhappiness, but in the long term is not satisfying and even more, becomes addictive (side effect).

Ehrenfeld elaborates, and this may be this most important thought for me in this book, that sustainability cannot be achieved by reducing unsustainability: Instead, a real paradigm shift is in order. This paradigm shift includes three sectors, humanity (our sense of ourselves as human beings), nature (our sense of our place in the natural world) and ethics (our sense of doing the right thing). Only if all three sectors are covered by this paradigm shift, will sustainability emerge. Here's a similar diagram from Wikipedia:



Besides Heidegger, he cites Erich Fromm, who identified two modes in humans, the "being" mode, and the "having" mode. We have shifted away from the "being" mode, and tend to live more in the "having" more: The more you have (money, cars, stuff), the happier you are. We even measure our wealth by the gross national product. To describe the "being" mode, Ehrenfeld also borrows from Maslow and Max-Neef: while Maslow's pyramid of needs is incremental (you fulfill each need after another), Max-Neef says that all needs (he identifies subsistence, protection, affection, understanding, participation, leisure, creation, identity, freedom) must be fulfilled at the same time in order to achieve wholeness and happiness. I find this closer to reality than Maslow's approach.

Ehrenfeld further describes that he doesn't believe that a shift towards sustainability will come from authorities: It must be a cultural shift. For him, the easiest way would be to re-design our everyday tools in order to make us more aware and steer our behaviour towards sustainability. He mentions for example a two button toilet, one button for a big flush, another button for a small flush. By offering a choice, responsibility is created, and a responsible behaviour can be automated in the long run. This is what he calls "Sustainability by Design".

The necessary paradigm shift is not easy to do, and Ehrenfeld is aware of this. In the last chapter, he has a great quote from F. Scott Fitzgerald

...the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function.

Quick fixes to reduce unsustainability will not work in the long run, but they may still be useful to get started and to learn from. However, true sustainability will only come if human beings are able to return to the "being" mode by a paradigm shift.

All in all an insightful, inspiring and well-written book with a relevant message, I urge you to read it. My copy of the book is now sitting on a shelf and would love to meet you; just let me know.

I'm an avid reader of the weekly newspaper "Die Zeit". In a recent edition they started a series of articles, called "Denker für morgen", focusing on people who are thinking about nothing less than the future of mankind. The first article in this series was on Robert Shiller, an american economist. He believes that markets need to be regulated in order to achieve a supply and demand balance, and to prevent a collapse.

This article made me curious about a recent book he co-authored, "Animal Spirits" (the other author is George Akerlof). It's based on the assumption that classic economic models insufficiently describe current macroeconomic events: in these models, humans base their decisions on rational economic reasoning, we call them homo oeconomicus. But according to the authors, humans hardly ever decide rationally, they are influenced by animal spirits. These animal spirits describe factors that influence decisions of market members, the authors list "confidence", "money illusion", "stories", "corruption" and "fairness".



Confidence (or the lack of) is a major animal spirit, and the easiest to explain: in boom phases people become over-confident in the economy, and in recession-phases under-confident. In the late 1920s people invested like mad in the stock market because they were overconfident, not because they actually felt that the stock prices reflected an actual value.

Just take a look at stock prices. What does the price actually represent? The value of a company? Or, what other people think is the value of the company? Or even further, what people think that other people think is the value of the company? This could go on forever. The authors compare the stock market to a beauty contest: if you had to bet on the winner in a beauty contest, you would go for the one you assumed most other people would vote for.

I also liked the chapter on stories: It is assumed that the human brain operates in a way that it memorizes stories best (that's the reason people employ Eselsbrücken). Therefore, a story can be processed more efficiently than complex and abstract issues like macroeconomy, and people thus easily believe in a story rather than trying to understand a complex system. An example: The recurring real estate bubble is (beyond other factors) fed by stories, like this one: real estate markets are an ever-growing market due to the limitation of space. It is assumed that buying real estate will only become more expensive in the future. So it appears reasonable to invest in real estate, although statistics disprove this assumption.

It's interesting to note that animal spirits not only determine the way we perceive the economy, but furthermore affect it directly.

The authors continue with eight economic phenomena, which cannot be described by classical economic models, but can very well be explained if animal spirits are included. Some are a little too technical for an economics-illiterate like myself, some seem a little superficial. I would have loved to see an actual basic (mathematical) model that uses animal spirits, as I can imagine how convenient the assumption of a homo oeconomicus is, and how complicated things get if these additional factors are included, and can feed back into each other.

The authors conclude by making the following point: Capitalism is very efficient in producing supply for all kind of demands. But if your demand is for snake oil, it also provides snake oil. This is why we need regulations. Taking animal spirits into account could lead to models that are more accurate in depicting the real world, and from these models we can learn which regulations can avoid disturbances like the current recession (which is also dealt with in a previous chapter).

At about 180 pages (not including the appendix), the book is a nice read, and it seems relevant to me. After all, it's a good reminder that we are indeed just monkeys in suits. If you want to read it, let me know, and I will send it to you. Books love to travel, they hate shelves.

"The Long Tail" by Chris Anderson, editor of "Wired", is a description of an economic trend, loosely based on the Pareto Principle.

The marketplaces of the latter half of the 20th century have been dominated by hits: a store carried only few items, which ideally sold in huge numbers. Carrying less popular items just didn't pay off, as conventional stores could only hold a very limited amount of items. But as the internet entered, offering these rarely requested items hardly increased expenses: No longer was real storage space required, merely hard disk space and bandwidth. All of a sudden a store could carry millions of items, and it even paid off if an item only sold like two units a year. Just multiply two units by a million items.



Imagine a hyperbolic curve: The x-axis defines items, the y-axis sales per year. The hits of the market are a tiny segment on the left: Few items which sell in huge numbers. This is what a conventional store carried. The rest of the curve is "the long tail": Millions of items which only sell a few times. An example of a long tail market is music: A conventional record store only had a few thousand records, while a store like iTunes has millions.

In long tail markets, hits become less dominant, as less popular items are able to rise from the tail to the head of the curve: Every item in the long tail is suddenly a possible hit.

Anderson illustrates the long tail idea with a lot of examples. Maybe take a look at Wikipedia's article on "The Long Tail", or read Chris Anderson's blog. Following up on the long tail idea, Anderson recently published an article well worth reading: "Free! Why $0.00 is the future of business". I find this particularly interesting, especially when reading the article with open source software in my mind.

In July 2008 Anderson published a revised edition of this book; I have only read the 2006 version.