Author: Isaac Morehouse

Two Habits That Help Me

I was checking out some new podcasts while travelling yesterday and listened to an episode of Tim Ferriss’s show where he interviewed Josh Waitzkin, on whom the book and movie Searching for Bobby Fischer are based.  Waitzkin mentioned several habits that keep him productive and help him maximize his day.  Two in particular stood out because I’ve found both extremely helpful when I practice them, but had not consciously thought about why that might be.  Waitzkin helped clarify the why.

The first is simply to begin the day with writing or some other kind of creative activity.  Do your creative work first, before checking emails or social media.  Those tasks and inputs will put your mind in a reactive orientation.  Once in react mode it’s very hard to keep the creative part flowing and it can make for a more stressful, chaotic day.  If you create first, you orient your mind creatively and then when it’s time for the inputs and tasks, you’re less reactive and more creative.

The second habit is to finish the work day with high quality work.  Whatever task or project you end the day on, make it your best work.  This not only gives a sense of pride, completion, and accomplishment that helps you transition away from work and unwind, it also leaves you in a productive, high quality mindset.  Your subconscious will carry that over into the night.  When you awake the next morning to create, you’ll already be in a good frame of mind to do so.

I’ve not always been consistent with these habits, but both essentially formed on their own as I found how valuable they were to getting and staying in the zone.  As I said, I hadn’t actually pondered them as explicit habits and discovered why they worked until the podcast, but they definitely do for me.

Should You Study the Greats, or Just Improvise?

It’s not uncommon for the most devoted students of personal health, or business startups, or filmmaking, or success more generally to be only moderately successful themselves. We’ve all met people who have read every “7 Ways”, and, “10 Tips” book on the market, yet still haven’t really gotten off the ground personally. So is greatness just too unique and context-dependent for useful road maps?

Most classes and books and seminars on how to succeed are run by those who have succeeded in some field or another. While their track record may be impressive, I always feel a little bit like successful people make up a lot of rules and patterns that helped them succeed in retrospect, and only some of them are real and valuable. If you’re too serious about it, it can make you feel like you can’t succeed unless you follow such rules or have great formmulae in place. In reality, those come later. First comes just doing stuff.

I think most endeavors in real life are more like bike riding than the checkbox tests in schools. If you wanted to be great at cycling, what would you do? Would you start with a seminar on bike riding? Best case, maybe you’d gain 5% of what’s needed from theory and experienced riders – like why a helmet might be a good idea – but you have to get 95% from just doing it.

This doesn’t mean experts and books are useless. Once you are an avid rider, only then do tips and techniques from Lance Armstrong really help you. It’s hard to even know what they’re talking about before that.

A lot of people in business school or getting MBA’s or at entrepreneurship conferences are like an aspiring cyclist spending years studying inside tips for winning the Tour de France and drafting and advanced specialized techniques for hill climbing, etc. before ever getting on a bike. Hop on and ride. A lot. Enter a few small races. Then whip out the books.

You don’t have the master something before studying it, but to really benefit from the insights of experts, you have to know what they’re talking about on a gut level. You have to be doing the stuff they’re teaching.

Glean what you can, but don’t ever let the quest for more knowledge on how to do something get in the way of just doing it.

Stay in Touch with the Future

There was a great Super Bowl ad that showed a now famous clip of two newscasters discussing the internet and email in 1994.  It was only 21 years ago, and already the thing they were so helpless to define or understand has completely redefined our world in a way all of us tacitly understand from birth. (You should see my kids with an iPad).

I’m an optimist and a big believer in the possibilities of tech and progress, yet too often this belief is just theoretical.  It’s easy to get a little impatient.  Yes, I know what’s possible in theory, but why don’t I see marvelous advances in practice?  Looking to the recent past is a great reminder of how much radical progress has happened in my lifetime alone.  Looking to the cutting edge of the present is even more exciting.

I try to read or watch something at least every few weeks about some area of science or technology that is a new frontier.  Whether checking on the latest in 3D printing, taking a peek at what’s going on at the Large Hadron Collider, or reading up on Bitcoin and its implications, I’ve discovered my sense of wonder is stirred by frequent updates from the fringes.  Every time I poke around new research and discoveries I wonder why I don’t do it more often.

If you’re looking for some crazy new stuff, here’s one I watched yesterday.  In addition to discussing some specific new technologies, Jose Cordeiro mentions four ways to deal with the future: Passive (bury your head like an Ostrich), Reactive (respond to it like a fire-fighter), Preactive (hedge against it like an insurer), and Proactive (create it like a builder).

Back to the Blog

I have said many times and I still firmly believe that the six months I spent blogging every day, seven days a week, led directly to the creation and launch of Praxis. Creating begets creating.  Posting ideas and words publicly every day puts you on the hook.  It makes you face fears.  It makes you ask “Why not”, instead of, “Why”.  It stirs the subconscious and unearths latent ideas and inspiration, and forces accountability.

Not long after launching Praxis, I stopped blogging here daily.  I’ve continued to blog once or twice a week at the Praxis blog, but I’ve done very little writing outside of what’s directly relevant to the company and its broader mission.  That’s been wonderful and will continue.  But it’s not enough.  I’m not sure what took me so long to realize it, but I need to blog every day.

I’ve been getting that restless feeling more and more, and wondering what to do about it.  I’m having the time of my life and facing new challenges every day with parenting, Praxis, and life in general, but I’ve felt just a little intellectually and spiritually sluggish in recent months.  Even my weekly blog posts for Praxis were sometimes a challenge.  When writing doesn’t come easy it’s a sure sign that I’m not ingesting enough new ideas.  When I’m reading or listening to interesting podcasts or lectures frequently, writing is easy.  In fact, it can’t be resisted and I often have to push other things out of the way to get the overflow of ideas out.  There is some kind of process my brain engages in when new ideas are fed in.  It does something to them and spins them back out reconstituted and reformulated.  I suppose it’s a kind of idea alchemy – though as anyone who’s read this blog can affirm, it doesn’t always result in the output being more valuable than the input!  It almost doesn’t matter the quality of the inputs or outputs.  Nor does it matter if anyone reads it.  As long as ideas are flowing in, being processed and transformed, and flowing out, I feel fulfilled and happy.

Blogging every day is the best way I’ve yet found to not let myself forget to consume a steady, healthy quantity of ideas.  Faced every day with the blank page, you realize quickly when you don’t have enough material to work with.  When you do, the posts write themselves and the challenge becomes keeping it concise.

That’s a lot of setup.  The point of this post is simply to say that once again I will be blogging here every single day, seven days a week, until further notice.  I’m not sure what I’ll write about or what themes might emerge.  I just know I need to do it to be my best self.

Take a listen to this great episode of the James Altucher podcast with Seth Godin and you, too, may be inspired to blog every day.

Better Off Free

11275_1658524154373144_4693890827086546057_nLiberty.Me was kind enough to publish a collection of essays I put together about a year ago in book form. Better Off Free spans a decade of my life, and in many ways tracks my intellectual journey.  It was fun to compile and I hope it’s enjoyable to read.  Special thanks to my good friend Zak Slayback for his fine editing work.

You can buy it in paperback on Amazon.

Alternatively, you can download the PDF, ePub, or Mobi file from Dropbox here.

I share the introduction to the book below, to give you an idea what it’s all about.

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Better Off Free – Introduction

This book does not present one unified thesis or argument, as it is a collection of articles and blog posts spanning nearly a decade and many different topics. There is, however, a central theme that runs through it and loosely ties the essays together. That theme is simple: freedom is better than force.

The moral and practical reasons for the benefits of freedom and the dangers of force are explored from various angles throughout the book. You can think of each essay as an individual point about this or that topic, standing alone with its own color, and the book as a blank canvass. As each point dots the backdrop, you begin to see when you back up something of a single image, like an impressionist painting.

The essays are ordered and sectioned to provide some kind of flow and structure, but it ought not to be taken too seriously. The order is almost a reverse-chronology of my own intellectual journey. It begins with the most radical ideas, and works backwards through how I came to them.

I began exploring economic thinking, which helped me see the folly of central planning and the power and beauty of spontaneous order. Section 3 is mostly concerned with these ideas. Along the way, I was surprised to find that some of the same principles overlapped with the moral order. Section 2 deals with the moral side of freedom.

Economics is not a normative discipline, but once the paradigm shattering nature of economic thinking permeated my brain, it turned me into a relentless questioner, which bled into all aspects of my life. I began to see the state as not only very inefficient and ham-fisted, but as deeply inhumane. This was not an easy evolution. I was dragged, to paraphrase C.S. Lewis, kicking and screaming to the radical conclusion that the state is a clumsy and barbaric farce at best, and a tool for the deepest evil at worst.

This was a rather depressing realization at first. It took time and intellectual effort to work out what, exactly, the implications of my newfound radicalism were for my own life and work. It took time to see the beauty of unplanned order more than the folly of states, and the empowering nature of human coordination instead of fear of it being disrupted.  Section 1 is, more or less, where I arrived.

I’ve always wanted to make people’s lives better. I started in humanitarian missions but wanted to do something on a more fundamental level – teach a man to fish and all that. I entered politics, thinking that’s what creates the policies and institutions we live under. I was wrong; politicians are followers and lagging indicators, not the creators of institutional change. I explored policy research and education and the popularization of economic thinking, which felt far more productive. I’m now in the realm of entrepreneurship, seeking to create the kind of alternatives that theory and history show to be better than the state-dominated status quo.

The journey is not over, nor will it ever be. This book shares points along the path that led me to a major transition from asking what works for society to seeking what works for myself in my own individual life. How can I be free?

Understanding the larger economic and social systems around us is incredibly valuable and instructive, not to mention enjoyable work, but at some point it comes back to you. Is your hope for a fulfilling life in the hands of other people and powers, or your own? What keeps you from being free?

I will only add one final disclaimer. Section 2 uses religious language and references, primarily Christian, as many of the essays were written for Christian audiences. If that’s not your thing, you can ignore the religious terminology and, I think, the arguments still stand. If you value life and find violence distasteful for any reason, the ideas in that section will hold true.

I hope you enjoy this collection of ideas. Many of them were originally published elsewhere in magazine or blog format for places like the Mackinac Center, the Western Standard, The Freeman, The Values & Capitalism Project, Libertarian Christians, the Mises Institute, Laissez Fare Books, Liberty Magazine, the Libertarian Alliance, and others. Thanks to these publications and so many other organizations and individuals that have helped me along my intellectual adventure.

Be free.

Isaac

November, 2013

Idea Mensch Interview

An interview I did with Idea Mensch on Praxis, entrepreneurship, and an assortment of other things.

Where did the idea for Praxis come from? What does your typical day look like?

Praxis is really the culmination of a lot of ideas and experiences, beginning with my time in college when I felt like given the time and money, I wasn’t learning nearly as much as I wanted to and I was getting better experience working than in school. Through many ups and downs and steps in my career path over the past decade, I finally pulled the pieces together and created the kind of educational experience I wished I’d had. The idea of work with entrepreneurs, the best of liberal arts, business, and hard skills training, and a largely self-directed program packed into ten months for net-zero cost was the realization of a long held dream and the answer to my own and many other students’ frustrations.

A typical day for me begins with a swim, breakfast, shower, and then a half hour or so of reading a few blogs and catching up on social media. Then I dive into my to-do list, which involves a lot of phone calls, emails, and Skype meetings with entrepreneurs in the Praxis business partner network, interviews with applicants, catch-up calls with participants, programmatic stuff with our Education Director, marketing plans and tactics (which are highly variable) with our Marketing Director, reviews and updates to financials, and many other interactions with many other people. I plow through a lot of emails, as I have a zero inbox policy and respond to just about every serious email I get.

I like to get outside for at least half an hour each day to break things up, sometimes just to walk, sometimes while making phone calls. I also work in at least thirty minutes to write pretty much every day, and time to read whatever book I’m on. I find that if I don’t make time for writing and reading, my mind begins to feel empty, and my energy soon follows. I need to feed on new ideas constantly to stay charged.

How do you bring ideas to life?

Action. I am heavily action biased, which can certainly get me in to trouble, but I find that any idea I analyze for too long without moving forward in some way inevitably dies an ignoble death. I need to see progress, so I push things and move them, even if just a little bit every day. From the moment the idea for Praxis came together in my mind, I began hashing and rehashing it, contacting people I’d need to help build it, buying domain names, doing informal market research, and anything I could to keep moving the inertia. If I do at least one thing every single day to get an idea closer to life, it has a far higher likelihood of success than if I wait around for a time when I can make one big move. I see it like exercising. If the idea is a healthy body, you’re better off doing one thing every day, even if it’s just twenty push-ups, then waiting for the perfect day to spend two hours in an elaborate workout at the gym.

What’s one trend that really excites you?

The massive reduction in transaction costs due to technology. There are so many underutilized resources out there – both people and goods – because traditionally it’s been really hard to gather the right information at the right time to make the right connections. Smartphones, location services, massive amounts of digital data and other technology have made valuable information readily accessible and seamless. We’re just seeing the beginning of the efficiencies and opportunities this creates with things like Uber, AirBnB, and other ways people can find what they need in places previously unavailable to them because of prohibitive transaction and information costs. Everything from specialized skills and knowledge from experts, to the best brunch joint in town can be accessed instantly, where you once had to know a trivia king or read a phonebook.

What is one habit of yours that makes you more productive as an entrepreneur?

Delete, shred, destroy. I am a minimalist. I try to clear out any and everything that is nonessential. I condense and combine wherever I can. I go paperless with everything, and if important things are sent to me in physical form, I snap a picture and store it in the cloud so I can throw out the paper copy. I keep my desk, my inbox, and my life in general as clutter free as possible. I used to collect things I thought would someday be useful, but I found the mental space required to have so much stuff around (both physical things and facts and tasks in my head) was immense, and reduced my productivity. I now record crucial info and to-do’s and rely on my calendar and list to remind me so I don’t have to remember, and I purge all that is not needed, and even some things that are if they’re easily replicable!

What was the worst job you ever had and what did you learn from it?

Bagging groceries when I was 14-15. I hate to even call it the worst, because I actually enjoyed it and have enjoyed every job I’ve had, but compared to all the rest, it was definitely the least pleasant and rewarding. I learned several valuable things. First, that time moves really slowly when you’re not in “flow”. When we were humming and lines were long, hours passed like minutes as I frantically bagged and carried groceries out. It was actually a rush and I’d give myself challenges to see how fast I could bag the groceries without damaging them. When we were slow, the minutes crept by slower than anything I’ve ever experienced. This is why I actually loved working busy holidays.

Another powerful lesson was just how hard good help is to find. Nearly all of my colleagues stole items from the store. I even had a book stolen from the break room. Many were fun to talk to, but not at all trustworthy or hard working. Just by showing up on time for every shift, I quickly become one of the most valued employees even though the youngest. It was a sad dose of reality, but helped me temper my expectations for a working world in which most people simply aren’t that good as employees.

Finally, I learned that those who hated their jobs did worse and were less happy than those who didn’t, and that it was largely a choice. Some of my coworkers and managers were always unhappy clock-watchers. They didn’t perform well and didn’t value their own work. Some took pride in it. It wasn’t a difference in ability or position, but a difference in outlook. Some had fun with work and treated it like a playful experience and one they could always improve in. They excelled and were generally happy. Others saw it as a necessary burden and did the bare minimum. They had little pride in themselves and were generally unhappy. It became clear that belief trumped external circumstance when it came to fulfillment.

If you were to start again, what would you do differently?

Take bigger risks sooner. It took me too long to realize that what everyone else says, does, and believes is not as important as my gut. I may fail more going that route, but failure is the best way forward, and it took me too long to not be afraid of it. I would try to get some of my earlier, crazier ideas of the ground instead of waiting for validation.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Constantly force yourself to put into words – written and spoken – your vision and value proposition as concisely as possible. Whether for your company or product, or just for your life in general. What are you trying to build? Why does it matter? What will be the outcome? It’s incredibly hard to understand and articulate, even for those in the middle of successful ventures! But it’s crucial self-knowledge and it brings about crucial self-honesty.

What is one strategy that has helped you grow your business? Please explain how.

Our business is brand new, so the only growth we’ve experienced this far is going from zero to one and getting our first class off the ground. The biggest aid to that was probably cashing in tons of accumulated social capital. I’d spent ten years doing favors for people, making connections, sharing information, ideas, and feedback generously, mentoring, and generally trying to be kind, helpful, responsive, and someone who gets things done. This built up a lot of goodwill with a wide network. When Praxis get going we needed as much as we could get, because there are some things you can’t do with money, time, or individual effort alone. We needed expertise, media exposure, connections, and much more, and it was only by cashing in on that accumulated social capital that we were able to grow from seed to sapling.

What is one failure you had as an entrepreneur, and how did you overcome it?

My original business plan for Praxis was essentially a work for free arrangement that I felt was really groundbreaking and beneficial to all parties. I was quite far along in the process when it dawned on me to check into current labor laws and regulations, only to discover that what I had in mind was basically illegal. You can’t work for free unless you actually destroy value at a company, according to current regulations. My initial reaction was resigned indignation. I was ready to give up on the whole idea altogether until my brother, a seasoned and successful entrepreneur and a close friend and mentor, just laughed when I shared it with him. He said, “That’s great! That’s what’s kept everyone else with this idea from moving forward, so it means less competition for you!” He assured me there’s always another way to get at the same end goal, and with some creative thought and effort, we found one.

I will never forget that phone conversation, or the non-threatened, playful approach my brother brought to the situation. He had been through things like this and had internalized the lesson that there are no obstacles that a good idea can’t overcome somehow. That was huge for me.

What is one business idea that you’re willing to give away to our readers?

Rental everything. I don’t want to have to own and maintain a weed Wacker, lawnmower, suits for formal occasions, golf clubs I seldom use, a boat, camping gear, etc. But I do want to have access to these things, either regularly or infrequently, and in quality and quantity it wouldn’t make sense for me to buy and maintain myself. A combination of businesses and individual owners on a one-stop peer-to-peer platform where prices, location, ratings and availability were open and accessible could make my life a lot easier and make use of a lot of underutilized assets sitting in garages, warehouses, or stores. Sure, it’s a logistical challenge, but you figure that out and you’ve got at least one customer for life!

Tell us something about you that very few people know?

I can clap with one hand. On both hands.

What software and web services do you use?

Google. Praxis uses Google apps for business, and the combination of my iPhone hardware with Gmail and Drive apps is unbeatable.

It’s simple, clean, has tons of storage space, and intuitive search function, and it’s the industry standard. I have no particular brand loyalty, so as soon as I use something I like a lot better, I’m happy to switch. Right now, nothing comes close.

What is the one book that you recommend our community should read and why?

The Act of Creation, by Arthur Koestler. This lesser known gem is quite an amazing book, jam packed with insight about what human creativity looks like and how it happens. It’s a powerful reminder of the value of daydreaming and subconscious activity. It’s empowering and humbling at the same time, like all great truths.

What people have influenced your thinking and might be of interest to others?

In terms of contemporaries, I like to read Fred Wilson’s blog AVC.com, I enjoy Seth Godin’s blog as well, and I love consuming nerdy economics stuff from Econlog, Econtalk, and The Freeman. If we’re talking all time, I’ve always appreciated deep insights on the human condition from Mark Twain, Albert Jay Nock, C.S. Lewis, Frederic Bastiat, Benjamin Franklin, Adam Smith, and Socrates.

Interview on Education

AP-IM article PRAXIS-HEADER-CONCEPT-1

From Allister & Paine…

Tell me about your background in education and how it inspired you to launch Praxis.

Isaac Morehouse: More than a decade ago, I was a frustrated college student.  All the best things I was learning came from working, and from my own study, not from my expensive accredited classes.  I discovered that getting good grades and gaining valuable knowledge were totally separate in the college experience.  I disliked the antagonism between students and their universities.  If it wasn’t tuition, fees, parking permit and textbook costs going up, it was poor quality instructors or new PC rules and bureaucracy.  You don’t see this in most industries; this thing where the producer of the good is not at all accountable to the consumer.  As long as the subsidized student loans and aid keep flowing in, the university does whatever silly thing it wants.  It all struck me as kind of a big joke.  I got paid on the job to learn amazing things that shaped me and stuck with me, meanwhile I was paying to sit in fluorescently lit cinder block cells where many of the people complained, half-assed the work, and didn’t want to be there – I’m not talking only about students.

I dreamed of one day starting my own college where work and class weren’t so starkly divided, where the relationship (and hence accountability) between the producer and the consumer was direct and immediate, where learners took ownership of their experience and didn’t pay for things they didn’t want or found no value in.

I spent the intervening decade working in and around college, nonprofits, and various educational andcareer preparation programs.  Most of these programs were free, and many of the students would say things like, “This is what I wish college was like!”

With the emergence of MOOC’s and the declining value of the college degree (it’s the new high school diploma), I decided it was time to revisit my old dream of a different kind of educational institution.  I put the pieces together – experience with dynamic businesses, a powerful collection of online resources and in-person discussions, mentoring, and self-guided projects, certified with oral exams (no multiple choice or memorization) – and crammed it in to the most compact and cost effective package possible.  A ten month-program with a net cost of zero (tuition being equal to earnings).

Explain the concept to me; what does it mean to ‘break the mold’?

Isaac Morehouse: Degrees are a dime a dozen.  No one cares any more.  What can you do?  What have you created?  Those are the questions that matter, and simply saying you bought yourself a degree from a university no longer signals those things.  There are plenty of reasons people go to college – as a consumption good (a four year party), to get knowledge, meet people, gain skills, find out what they like – but every one of these can be had better and cheaper elsewhere.  The real reason people keep paying to go is to get that coveted credential.  The degree is supposed to be a ticket to a good-paying job.

There are two problems with this.  First, the market is inflated.  Everyone has one and it doesn’t really guarantee you much more than a least common denominator kind of signal.  The second problem is, frankly, making a job the goal is kind of boring and not that secure any more.  You are not your job.  You are your own brand, whether you want to be or not.

You’ve got to think like an entrepreneur, whether you ever start your own business or not. I think humans are born entrepreneurs and the education system beats it out of most of them.  You’re rewarded for conformity, following rules, not questioning the purpose, not innovating around problems, not suffering big failures or benefiting from huge successes.  It’s a rigidly controlled environment that looks nothing like the market.

To break the mold is to take your education into your own hands.  Do what works for you, not the easy, well-worn path.

Why do you think alternative education programs like App Academy & Dev Bootcamp have such higher job-placement rankings than traditional 4-year universities?

Isaac Morehouse: Employers don’t know what they’re getting anymore if they hire based on a degree.  They look for experience and evidence of actual value created.  If you’ve got the courage to do something different from the herd, and you’ve done something specifically that demonstrates your abilities – like built a website or programmed some software – that’s tangible and valuable to employers, co-workers, investors, customers.

The VC firm Andreessen Horwitz says that, not only do they not frown upon entrepreneurs who have skipped out on the college conveyor belt, they actually see a positive correlation with dropouts and all the attributes they look for in a founder.  Soon, lots of people will be crafting education experiences for themselves outside university walls, but today there are first mover advantages to breaking the mold.

Talk to me about how you are single handedly redefining the concept of a ‘college dropout.’ What does that phrase mean at Praxis?

Isaac Morehouse: Who is in the driver’s seat when it comes to your goals, skills, ideas, interests, and experiences?  You can either move forward under your own direction, or get pulled wherever the current takes you.  Those who are conscious of this fact and are explicitly setting out to do the things of most value to themselves rarely find college to be the only or best choice.  If you go to college, I can’t really tell whether you’re actively in control of your journey.  Everyone does that.  It’s actually harder to not go that route today.  Doing something different sends a strong signal that you have taken ownership of your life.  That’s exciting.

I meet so many young people who look a little ashamed when they tell me they quit school to build apps, or start a marketing business, or learn to code.  They have paid a huge social cost to pursue something more valuable, and they’re still a little insecure about the fact that they don’t have an easy answer at networking events for, “Tell me about yourself.”  Guess what: I don’t really want to hear your major or educational status.  That tells me nothing about you.  I want to hear what you’re pursuing, what you value, what you can do for yourself and the world.  It’s hard to hone that in a classroom.

College is kind of a personal development moral hazard problem; young people defer the hard work of self-discovery and ownership of their professional lives because they think a credential will do the heavy lifting for them.  It won’t.  The sooner you learn that the better.

It’s not about being a college dropout, which implies you fell flat somehow, it’s about being an opt-out.  You opted out of a system that wasn’t built around you, and you crafted your own educational experience out of the best of what’s available to you.

How grueling is the Praxis application process?

Isaac Morehouse: About 10% of applicants get accepted.  We’re looking for work ethic and drive above all.  I call it the “sleep in your car” test.  You’re either willing to sleep in your car to achieve what you want or you’re not.  We don’t actually make you sleep in a car, but that’s the quality we’re looking for above all.  We have a short application on the web, and then a few phases of supplemental material we request if you make it past stage one.  There are two interviews, and if you make it that far, some interviews as we work to match you with a great business partner.  A lot of smart applicants don’t realize it’s not just about shipping off your application once and being done with it.  It’s a process, and we want to see the same promptness and professionalism throughout the entire thing.

Who are a few of your entrepreneurial heroes and why?

Isaac Morehouse: I’m going to get old-school here.  James J. Hill is one of my favorites. Hill refused any government subsidies, eminent domain land seizures, or special favors that all the other railways were lobbying for and getting. He built a better railway and outcompeted them purely on the market, while they all squabbled over tax dollars and made cozy with regulators and squandered money.  It’s a classic case of what happens when you’re focusing not on your customer and their needs, but on big political interests and their needs (not unlike what we see in higher ed.). Hill was accountable to customers and investors, the others were accountable to Washington power brokers.  He created value, they created corruption, graft, and waste.  I’m a fan of Cornelius Vanderbilt for much the same reason.

There are a lot of others I really respect and have learned from, but the danger of mentioning those still living and active is that they’ll go on to do something really stupid or offensive, then I’ll be asked to defend them! In general, I love entrepreneurs who work around stagnant status quo solutions the way Uber works around taxi cartels, or Bitcoin works around a screwed up banking and financial racket.

What value does Praxis provide to businesses that they can’t get anywhere else?

Isaac Morehouse: Businesses are hungry for good talent.  It’s hard to find.  Specialized skills can be taught, but raw drive, reliability, values, determination, and teach-ability are rare and hard to identify.  Praxis does that for you.

We send businesses top-notch young people who are ready to come in and help in any way they can.  These are individuals who don’t want to merely perform tasks, they want to understand the vision of the company and help you build it.  Many baby-boomers are getting close to retirement or slowing down and they want someone to grow into a leadership position.  They may not have a child who’s able or willing, but they want someone to pass their company and their vision off to.  Those are the kind of people we’re sending to our business partners.

Unlike interns, who are typically there for only a few months, and for whom it takes a lot of time and effort to find and manage, Praxis participants spend ten months in a business, we vet them and mentor them along the way, and many end up with job offers from their business partners after the program.  It’s a great, low cost way to get young talent in the door who can both create immediate value and get a ten-month test-drive for future compatibility.

Interview with a Nine Year Old

A little more than a year ago, I interviewed my son Nolan for this blog.  We had a lot of fun, and I thought I’d interview him again now that he’s a year older.

We followed the same questions from last year’s interview, but decided to change the format to audio.  Last year I recorded it but had to transcribe the whole thing.  This time, I decided to let the raw audio do the work.  Enjoy!

The Education Calculation Problem

In the last century a minority of great economists, led by Ludwig von Mises, clearly and forcefully pointed out the impossibility of calculation and planning under a socialist economy.  History bore them out, and the Soviet Union collapsed under the crushing weight of its own absurdly uncoordinated production patterns.  Absent a price system, planners grasped for anything they could measure in order to get the right mix of goods.  They judged the success of the nail factory by the total weight of all the nails it produced, which naturally led to factories producing giant nails of no use to anyone.  Then they switched to the number of nails produced, which led to tiny nails, equally useless.  It may seem like a silly case of some rascally producers, but regardless of the intentions or skills of the workers or planners, how were they to know what type, size, quantity and quality of nail to make?  They had no connection or effective communication channel to the consumer.

The insights about the impossibility of planning under total socialism apply equally to so-called “mixed” economies, except that whatever remnants of a market are in operation will stave off total collapse at least for a time, acting as a kind of safety valve.  In other words, the same top-down disorder that resulted in a surplus of mustard and a shortage of bread can be expected in the “planned” segments of any economy.

Education is “mixed” in the US, but more top-down than market based in almost every case.  There is almost no relationship between the end users of education – students and their parents – and the producers and planners in the system.  It is no wonder the education system focuses on compliance, obedience, respect for authority, behaving exactly like other people your age, memorizing things whether or not they’re valuable, and a lot of other characteristics inimical to a free society and entrepreneurship, production, and innovation.  They focus on these things because they can be measured absent a market.  Something like student satisfaction is far more important, but only the nuanced, complex, adaptive market order can cater to such individualized, subjective vagaries.  Top-down orders don’t know what to do with it so they endlessly tweak and argue over Common Core and other arbitrary outputs that can be measured.

Are teachers paid too much?  Too little?  Are facilities too big and costly?  Too small and dated?  Are class sizes too big or too small?  Do students need more tech, or less?  Longer school days and years, or shorter?  More extra-curriculars or fewer?  More or less homework?  More STEM or more arts?  No one knows, and no one ever can know absent a market.

Imagine markets for other goods and services if they were managed in this way.  Does your local grocery store need more of fewer types of refried beans?  Do you think a town hall meeting and a few bean board elections would come to a better solution than the market process?  Does “society” need more trucks and fewer sedans?  The absurdity of these questions ought to give pause before we enter ridiculous debates about whether schools or universities need more of this, or less of that.  Good intentions and good people can’t make sense out of the chaos.  Only markets can.

The more managed a system, the more it relies on what can be easily measured, and will therefore tend to produce those things rather than what is of value to consumers.  If this goes on long enough, consumers may forget that they even have an opinion, or that they could even value things other than the low-quality product they’re given.  If you’d never lived in a world with a flourishing, diverse market, you may not even know that you wanted low-sodium extra smooth refried beans, because you didn’t even know canned beans existed.

The solution in socialist countries was private property.  Even at its peak, those who went outside the system and operated in black markets kept some semblance of quality of life possible.  Once people were formally allowed to take ownership over their own lives and resources, markets and a functioning price system emerged and quickly began the ongoing coordination and creative destruction of a beautiful spontaneous order.  Consumers were once again king, and their wants and needs (sometimes unknown until entrepreneurs offered it to them) were the ultimate driving force.  Production patterns became flexible yet highly efficient at moving resources from lower value to higher value uses, as determined by the preferences of the end user, not some board or commission.

Unless private property (the ownership of ones own learning) in education reigns, educators will continue to grasp in the dark for what to produce.  They’ll tend toward uniformity, authoritarianism, and clumsy, blunt approaches that lend themselves to easy measurement.  Once consumers seize ownership of their own learning and seek products and services outside the grip of the state, the education market will reach full bloom and a cornucopia of methods and means will emerge.  Until then, the question, “What should education look like?” is as unanswerable as, “What should an economy produce?”.

The Craziest Ideas Are the Ones Most In Need of Intelligent Responses

As soon as you say, “Everyone should believe X, and if you don’t, you’re a crazy”, you make X look both less desirable, and more likely to be mistaken.

If X really is obvious, you needn’t pressure everyone to accept it. Anyone who denies the irrefutable is not going to be pressured anyway. An appeal to authority or consensus is not going to win over doubters, nor should it. If X is untrue or even a little bit off in some way, your anger at non-believers will harden your perceptions and form an intellectual arrogance that blinds you to new developments. It also makes you look like an ass who’s afraid of a world where people believe things differently than you.

Believers in far-fetched, fringe ideas rarely suffer from this kind of angry, shaming proclamation, because they’re used to their ideas being considered fringe. Those who believe generally accepted ideas, or who oppose fringe theories, are most in danger of this mindset. They may be entirely correct that the fringe ideas are silly, but the angry demand that everyone agree with generally accepted ideas is at least as anti-intellectual as the fringe ideas themselves, and revealing of a deep insecurity.

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Ideas and Experiences

From the Praxis Blog

Ultimately, what people believe determines the kind of world they live in. When the bulk of society is willing to tolerate some kind of annoyance, or oppression, or shortcoming, or injustice, or unfairness, it is likely to emerge in that society. Everyone weighs the costs and benefits of resisting undesirable features of social and political institutions, and when the costs are too high, they find ways to cope rather than push back.

Sometimes the coping includes creating belief systems that label the undesirable features good, or at least inevitable or necessary. These status quo justifying belief systems keep the status quo safe from pressure to improve. You see this in business, politics, and all manner of social settings.

If the beliefs of members of society are the binding constraint on the social order, how do those beliefs change, as they sometimes do, and often quickly and radically? (Think about the complete reversal of the common beliefs about slavery in the early 19th century, and the worldwide institutional changes that rippled outward from it).

There are two primary ways to change beliefs. You can give people new ideas and new experiences. Creating new ideas is to directly confront those that form someone’s belief system, and ask them to make room for new ones. It is to conceptually challenge, confront, question, or inspire. Think of the people who challenge the status quo with books, songs, sermons, speeches, essays, and conversation. Think of the times your mind has been opened or changed by a teacher or author or friend.

It’s easy to assume this direct educational approach is the only way to change beliefs, but there is another way more subtle and just as powerful. It may be less glamorous because it often lacks the decisive light-bulb moment or a clear hero, but it’s effect is no less profound. It is to give people new experiences.

This approach to changing the world does not require an intellectual turnabout, or any arguing over theories. When you create new experiences and offer them to the world, they are either valuable or not. If they make lives better, they succeed and overtake or fundamentally alter people’s beliefs about the status quo, sometimes before anyone consciously notices. Those who create new experiences are entrepreneurs, and they are world changers just as the influential intellectuals.

While people endlessly debate the merits of immigration law, and whether individuals from other countries should be allowed to work in the US and on what terms, entrepreneurs keep improving technology and creating jobs for foreign workers where they can create value for US firms and consumers without having to hazard immigration red tape. Innovators find ways to integrate the world economy even when political institutions and public belief make little room for it. Experts long debated the correct way to determine long distance telephone rates, who should own the valuable telephone lines, and how they should be managed. While they were wrangling, cell phones were created, and now the debate seems meaningless. While defenders of the status quo say taxi service must be regulated and restricted to work, Uber comes along and awakens us to the reality that it doesn’t.

People form beliefs with the best information available. Often, it is assumed some particular societal deficiency is inevitable simply because we lack the imagination to envision a different solution. You can open imaginations by thoughtfully articulating why the experts are wrong and computers can be small enough and useful in the home. You can also open imaginations by creating the microchip, and making, marketing, and delivering products that use it to better peoples lives.

When you see something unsatisfactory in the world around you, know that the beliefs which sustain it are subject to change. If you want to help humanity forge ahead, create new ideas and new experiences.

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No Home Should Sell for Less Than $100,000

I am appalled by the fact that some people live in homes that cost less than $100,000.  It is truly tragic, and something my conscience can hardly bear.  That is why I support laws that require all homes sold to sell for no less than $100,000.

That is the same argument made by those who support minimum wages, “Sweatshop” bans, and other workplace and compensation regulations.

Every exchange has two sides.  Both parties give something to get something.  When acquiring a home, you give money to get whatever value the home will provide you.  When acquiring a job, you give your productive capacity for money.  If a home costs more money than you have, you simply can’t buy it.  If a wage costs more productive capacity than you have, you simply cannot “buy” it, or exchange your labor for that wage.

Demanding that all homes be sold for at least $100,000 does not magically put money in the pockets of those who have less than that with which to purchase a home.  Demanding work be compensated at a certain price (whether by wage floors, forced offering of benefits, work hour restrictions, etc.) does not magically enhance the productive capacity of the worker.  In both cases, the least well off have simply been priced out of the market.

You may feel sad in your quarter million dollar home when you realize many people have $60,000 houses, but only a fool would respond by demanding homes be sold at a higher price to ease the plight of the less well off.  When you feel bad about people only earning a few dollars an hour, it would be just as foolish to demand that the jobs they wish to purchase only be sold for a higher price than they can afford.

If Steve Jobs Had Been President

Some thoughts on the movie Jobs, recorded while driving to the office this morning.  Summary: institutions matter…a lot.  A guy like Steve Jobs in a political system is going to be either ineffective or destructive.  In the market, he was both effective and productive.  (Sorry about the noise from the McDonald’s drive thru.  I had to get some oatmeal and coffee!)