Flash Boys is the most recent book from Michael Lewis, who is one of the best in the business at taking a complicated story and making it a fast-paced and engaging read. Here are some quotes that jumped out at me while reading the book, and my interpretation of how they can relate to work and life:
‘When something becomes obvious to you… you immediately think surely someone else is doing this.’”
– Dan Spivey, who decided to create a new, straight-line path for a fiber optic data transport line between Chicago and New York.
A true innovator’s dilemma. You come up with a great idea and it is either a) flawed in a way you haven’t realized yet; b) being thought up and acted upon by three other people you haven’t heard of yet; or c) you really have struck gold. This can be a paralyzing moment for a new concept, and it is a delicate balance between doing your homework to make sure it’s worth investing in and not blowing your opportunity to be first to market. However, if the ONLY differentiator your solution has is time-to-market, than you had better come up with a follow-on strategy. History is littered with “firsts” that fell by the wayside once someone came along who did it slightly better or cheaper.
‘People lived beyond their means, and the way they did it was by going into debt, That’s what shocked me the most. Debt was a foreign concept in Canada. Debt was evil. I’d never been in debt in my life, ever.’”
– Brad Katsuyama of the Royal Bank of Canada upon his arrival in Manhattan.
A lovely lesson from the North. While we all know that debt is often required to grow a business or own a home or afford an education, the fact that attitudes regarding unnecessary debt didn’t change after the 2008 crisis shows we have a ways to go.
‘It’s not just enough that I’m flying in first class. I have to know my friends are flying in coach.’”
- Jeremey Frommer, founder & CEO of Carlin Financial.
We’ve all interacted with these types before, but when this attitude dominates your workforce, people are too focused on their own individual incentives vs. those of the company as a whole. Which can lead to some pretty lousy decisions.
For the first time in his career, he felt that he could only win if someone else lost, or, more likely, that someone else could only win if he lost.”
- Katsuyama’s feelings on what had happened to the U.S. financial markets.
Understanding if your market opportunity is a zero-sum game is very important. If you and your competitors are all competing for the same limited pool of customers or advertising dollars or real estate, then it is going to be some nasty business and the focus will shift from creative innovation to cold, hard optimization and commodity avoidance.
‘People in this industry don’t want to admit they don’t know something… Almost never do the say, ‘No, I don’t know. Tell me.””
- Kasuyama on how the ego and insecurity of Wall Street led to a system where almost no one actually understood how it worked.
As I have written about before – admitting ignorance can be an opportunity. But in this world, that was viewed as a sign of weakness so instead people were operating without full knowledge of the situation.
A product manager, to be any good, had to be obsessive. The role has been spawned by the widespread belief that traders didn’t know how to talk to computer geeks and that computer geeks did not respond rationally to big, hairy traders hollering at them. A product manager stood between the two groups, to sort out which of the things the traders wanted that were most important and how best to build them.”
- The authors’ description of the product management role on Wall Street.
Product management is different everywhere you go. For the product managers in these banks, it seems like a thankless job where you’re not spending a ton of time surveying the market and getting ahead of it, but rather being reactionary and triaging things. Unfortunately, this is often the case in businesses where they are playing catch-up or just have too much of a backlog to ever get their head above water.
‘I know what you’re doing. It’s genius. And there’s nothing we can do about it. But you are only two percent of the market.’”
- A high frequency trader from the Citadel.
The sad truth is that you can be innovative without truly being disruptive. I’ve had the good fortune to work on several solutions that, for the customers and markets where they were implemented, completely transformed how things were done. But if you can’t get mass adoption, it doesn’t really matter much in the long run.