My policy of buying stocks is simple. I pick the companies that are market makers, and are or will be the market leaders ten years from now, and then I hold them, and buy more when they go on sale.

This post – it’s just my view of the future. I’m going to start by analyzing one company we all know and love – Amazon (AMZN).

This is a company that permeates our lives (even my grandpa has ordered things from Amazon), but most people have only a vague idea about their real business. Amazon has two core businesses (again, this is all my opinion and understanding and has no specific basis in financial data).

The first business which we all know and love is their retail store network. You can get anything under the sun there — and I have. I live in a city and I don’t have a car. It may drive the mailman nuts, but I get packages delivered almost every week. When I lived in a big apartment building with mostly older people, I was known as the package guy. They thought I was running some kind of shady business – but I was just shopping for my daily essentials. Whether it’s some knicknack I need for one of my many hobbies (photography, music, etc), household items, art supplies, and of course books – it all comes from Amazon.

Now let’s look at my generation – Millenials, Gen Y, Echo Boomers, whatever you wanna call us. Second largest generation in history (after our Boomer parents). More of us live in cities. We’re more affluent. We drive less. We lead busier lives. We’re phenomenally Internet savvy, and thus empowered to be market mavens. We’re connected 24×7 — some of us through multiple mobile devices. We desire customized shopping experiences. We carry a strong sense of entitlement combined with a lack of patience and an expectation of on-demandness (I want it now!)

Shopping online, whether at a desktop or on the go is the perfect solution for us. It wastes little time, it offers vast choice, and it gives us a customized experience based on the recommendations of others. What this adds up to is lots of money lining Amazon’s pocket as we choose to do our shopping with one click. And let’s not forget that many of us are starting to have kids. And that these kids are going to be ten times more connected than we ever were.

The second business, which most consumers just don’t know the first thing about – is cloud computing (cloud infrastructure, to be more precise).

Somewhere between 2007 and 2008, the traffic through Amazon Web Services (this is all of their APIs, or interfaces for programmers who build services on top of Amazon infrastructure) exceeded the traffic of their entire global retail network. Read that last line again, it’s important.

Is this (going to be) a *huge* business for Amazon? You bet your sweet behind. Amazon has been expanding its cloud business by leaps and bounds, providing many a startup and a few very savvy enterprises a way to save significant money while gaining lots of flexibility, by moving their infrastructure into the on-demand cloud.

With four years in the running, Amazon is pretty much the undisputed heavyweight champion of the cloud infrastructure market. Now, yes – Google is probably building something to truly compete with Amazon’s offering (App Engine was just a taste of things to come). But with enough lead time, market presence, and enough cash on hand (more than six billion) to buy up and coming startups in the space, Amazon is looking strong to remain the leader in cloud infrastructure, or at the very least a very strong second if it starts getting more heat from Google.

Amazon is up 338% over the last 5 years (that of course includes the recent financial crisis and recession). How’s your index fund doing?

Update 10/26/2011: I sold Amazon right around $220 because despite my continued belief in everything I wrote above, it’s P/E ratio is just way out of control, so I felt it was ripe for a correction (and in fact, it corrected recently quite a bit). You can own AAPL for less than 7 times the P/E (amzn PE at 104, appl at 14). I’m not stock analyst but amazon has one of the highest P/E’s in the tech industry, and Apple has one of the lowest. Meanwhile Apple is now the biggest company by market cap in the world and continues to deliver quarter after quarter of incredible performance. If AMZN comes down to a P/E in at least in the 50′s, I will probably buy again. This page has some more information on why AMZN’s P/E is so high, and maybe they’re right, I just don’t think it’s worth the risk when you have such a tasty low hanging fruit (AAPL).

I’m standing outside in the rain, sick, coming from the doctor. I dial yellow cab. Can I please get a taxi at 14th and Castro? Sorry sir, I need an address. I don’t know the address, I’m at the corner of 14th and Castro standing out in the rain trying to catch a cab, can you please send a cab here? Sorry I need an address. Click. They actually hang up on me.

Yellow cab, you’ve permanently lost me as a customer. I don’t get it. In an industry where pricing is fixed, why not optimize for excellent service to get customer loyalty? Do you think there’s an infinite number of customers who will always dial yellow cab because of its name? A couple more blog posts like this, and that name won’t mean a whole hell of a lot.

To those looking for reasonable cab service in San Francisco, I recommend DeSoto cab, which apparently has no problem sending a cab to a well known intersection. Good to know that there are places where common sense still prevails.

(I also apologize to my readers for this blatantly self-promotional post, but you know how the SEO game goes…)

To land your dream job, you need to target your employer. Pretend to work for them and do something that proves you’re the person for the job. Show them your thought process by keeping a blog and being active in online communities. Show them your work by participating in projects and displaying them to the world.

At the same time, employers need to start getting more creative to find the talent they seek. Posting your job requests on monster with the same dry templated “5 years of experience with these 15 things” speak isn’t going to get you very far.

Why did I go to interview at CohesiveFT? It was their craigslist post that got me interested. They were quick to spot emerging trends (three years ago that was Ruby on Rails, and using Macs as dev machines), and used creative language that showed me that they were thoughtful and had personality. They stood out from a sea of dry and robotic postings produced by HR departments listing unrealistic requirements while sorely lacking a clue. And why did they hire me? I was an early adopter, I wanted to use exactly the technologies and platforms they found exciting, I had a blog where I shared my thoughts, and I had a project that demonstrated my skills in a way a standard resume could not.

Here’s the thing – it’s still early days for personal branding. Most of your peers are mass-blasting companies on Monster with the same resume template. Most of them don’t have much of an Internet presence beyond Facebook and LinkedIn. There is still a ton of room to stand out and get employers to notice you.

How to get a competitive advantage over your peers and land your job 2.0:

• Know what job you want and tailor make a website/resume/portfolio for it.
• Participate online – blog, tweet, etc.
• Get your name all over the interweb – would your employer rather hire/interview someone they know nothing about, or someone they can get to know in advance by googling?
• If you don’t know about SEO, ask a friend or use a blog platform like WordPress which does much of the work for you. This will help you get in the top ranks on Google for your name.
• Update your site regularly to get more Google juice.
• Look for job opportunities in unlikely places, where fewer people are looking (facebook, twitter, linkedin, craigslist, niche job boards like jobs.37signals.com). Forget about Monster and the other big job sites.
• Follow the companies you want to work for – their blogs, their tweets, their employees etc. Start conversations with them.
• Create things that are of interest to your future employer. Pretend you work for them and execute a project that would make them envy your work.

• 30 second spots interrupt you right as you’re watching a show so your annoyance factor is high.
• With a 2 minute spot, the advertiser has to work to capture your attention. This is a key aspect. One recent commercial I saw was a 2 minute short film about Honda racing. The film was actually relatively interesting to watch and a lot more palatable and engaging than a 30 second spot involving jingles and a radio announcer voice.
• The 2 minute spot will give advertisers more creativity to deliver content that is actually interesting to users, rather than resorting to traditional 30 second spot limitations of drilling messages into your brain.
• I am more likely to associate a positive experience with a brand if they’ve earned my respect. By showing me an interesting clip and then leaving me at peace to watch my show, the brand wins.

I found one blog that claims an 88% response rate in favor of the 2 minute ads. They also talk about how it would be potentially hard for advertisers to come up with good content, making a point that a 2 minute long commercial about Wal-Mart may be hard to swallow. This is a Good Thing. Advertisers should work for our attention. If they can’t muster up an interesting 2 minute clip, then they don’t deserve our attention.

The age of push marketing is coming to a rapid close as our primary content delivery method shifts to the Internet and on-demand technologies. We’re not going to sit there and wait for our shows to come on, we’re just going to click a button and watch what we want, when we want.

But we need to make ads just as pullable as we do our content. If I’m gonna have to watch a 2 minute ad, why shouldn’t I choose which ad I want to see? If I’m presented with 2 or 3 choices I might click on an 2 minute long ad about rock climbing because I’m really into that, or a funny short advertising The Office, but I’m not really into shopping at Wal-Mart so I’m going to ignore that one whether they like it or not. With pull advertising, the publishers also get my attention data, because I chose to watch their ad over several others. They get data about how they’re doing demographically, and they get data about how they stack up against competitors.

Hulu would also get an interesting idea about advertising demographics and determine ad popularity. Eventually they could use this data to figure out which ads people would like based on ads they’ve watched in the past and attention data from the rest of the community. This could usher in a new age of advertising where crappy uninteresting ads float to the bottom and out of sight, creating a competition for quality of ads by the publishers.

When the ad content gets interesting, user attention is captured, users aren’t annoyed by bad and irrelevant ads, everybody wins.

The book presents lots of interesting evidence for this, and even throws out a number – you need 10,000 hours of practice at something to achieve expert level. Gladwell says getting started young and having access to the environment they needed to spend those ten thousand hours perfecting their art helped Bill Gates, Mozart, and the Beatles to become great.

The other key notion in the book is that you have to be just good enough. For example, to win a Nobel prize, statistically you need an IQ of about 130. But it turns out that having an IQ of 150 or 200 does not increase your chances of getting the Nobel prize. In other words, there is a particular threshold above which you are good enough to get a Nobel prize. The rest is up to how hard you work, the hours you put in to practice and get great at what you do.

Not all of us can be Nobel prize winners, but most of us are probably good enough in our areas of specialty to have a chance at greatness. So the only thing standing in our way is practice. There’s my inspirational thought for the day…time to go practice :-)

No previous modeling experience is necessary, and shooting will take place on saturdays and sundays in Chicago and Evanston, at locations of your choosing, as long as they’re easy to get to by public transportation. Please contact me at yan AT pritzker DOT ws with your two identities (it’s ok if you need time to think about them) and your availability over the next two months if interested. You will receive a CD with the full resolution photos for printing or publishing on the web. Thanks!

Update: Please see the scheduling page for my availability.

When I was telling my friend about the book, she asked me why she should read it? This book applies to everyone. Not just entrepreneurs and social networking mavens. Because it talks about creating change and leadership. One of the most useful subjects he touches on in this book, is leading in the workplace, especially the concept of leading from the bottom. Whether you work in a 5 person startup or in a 100,000 person megacorp.

Seth tells a great story about how in his youth, he couldn’t get approval from his boss to work on a particular project that he was very interested in. So he did it in his spare time, and he started an internal newsletter about it. As people became aware of what he was doing, and became interested, they donated their spare time to help out, and soon enough most of the project team had defected to Seth’s project (in their own spare time, of course), until the management realized the power of this new idea and made it official. Creating a newsletter

helped create a tribe around this project, and helped Seth become a leader and create the change he wanted.

Yesterday, Seth and Robert Scoble, who became famous first as an internal blogger at Microsoft, had a great livecast about Tribes. Scoble mentioned how he had created change at Microsoft by creating a place for thought and conversation for people in the company internally. At Microsoft. A mega giant corporation. Who would have thought one man could influence change in upper management, from the bottom? The reason it worked, is that Scoble wasn’t acting alone. By creating a place for like-minded individuals to gather and talk, he started conversations, internally, externally, everywhere. Conversations that led to change.

Seth and Scoble both talked about how the increase in communication capabilities on the Internet and within companies creates a flattening of hierarchy that makes leaders out of everyone. You just have to seize the opportunity. What does it mean to lead? To create internal change, to reach out to your customers, to create communities you’re passionate about, both within the company and outside it. One thing Seth said during the podcast was really powerful, so I’ve transcribed the quote here. It’s important enough to be in bold.

Ultimately everyone is self employed. Ultimately, you cannot say, oh I work at General Motors I’ll just do what the boss says and everything will be fine. If you think you work at a company that will not let you lead, I think you’re wrong, and I think that you are hiding, but it’s possible that you’re right. If it turns out that you are right, you should leave. And the best way to find out if you’re right is to lead and see what they do. [...] To work at a place where you are afraid to stand up and lead in any way is an incredible waste. You will never get better at what you do, you will never extract value from what you do, you will merely be a replaceable cog in the machine. [...] You have to decide, before the week is over. I don’t care what the economy is like — the kind of person who can lead, who desires to lead, who insists on leading, will always be able to find a great job.

The bit that Seth really drives home is that no one is preventing you from being a leader. If you work in an organization that you think would frown upon you leading, whether it means talking to your customers and creating passionate tribes there, or even informally leading groups within your own company to create change, you are probably wrong. To give a small example, think about so many old school megabrands who are just completely stuck right now. They don’t know how to embrace communities, how to build tribes. They are used to old school unidirectional marketing. They don’t get that traditional advertising is not working. They don’t know how to create conversations.

But it’s not that these companies lack talent and knowledge. That talent and knowledge just happens to be locked up in what’s likely to be the lowest tier of the company workforce – the smart, new media savvy crowd, coming straight out of college, having grown up on the Internet, YouTube, microbrands, and the Long Tail of everything. Given no official power to create change, these people need to lead from the bottom to create internal tribes that can create the change the organization needs to create passionate external tribes.

Speaking of the Long Tail, it dawns on me that what Seth is talking about in his book is the Long Tail of Leadership. A leader isn’t just the head of a country, organization, or team. As communication increases, hierarchies flatten, employees and customers can talk directly, niche communities are created around the most obscure interests, leaders of all shapes and sizes must rise up to facilitate the tribes that form. In their podcast, Seth and Scoble both emphasize that leaders aren’t special, they are every day people who rise up to become facilitators of their tribes.

The Tribes Q&A document is a free resource that is a great accompaniment to the book. It’s written by members of Seth Godin’s own tribe, from their personal experiences with leadership. It’s a great lesson and an illustration of the very point of Tribal leadership itself.