Zero to One, Peter Thiel

http://www.amazon.com/Zero-One-Notes-Startups-Future/dp/0804139296/ref=sr_1_1?s=books&ie=UTF8&qid=1460935376&sr=1-1&keywords=zero+to+one+peter+thiel

A book that FAR exceeds it's promise. It has a LOT of great experiential documentation on startups, but the astute observations on attitudes around the world, misconceptions people have and just plain pithy contrarian wisdom is what really sets it apart. Thiel "failed" to get a SCOTUS clerkship (barely) and thus ended up founding PayPal which merged with Elon Musk's X.com to become a very successful business -- many good stories about how those things happened.

First the title -- Doing more of what we already know takes us from 1 to N, creating something new takes us from 0 to 1. "Today's "best practices" lead to dead ends, best paths are new and untried.

The question that Thiel asks when he wants to understand someone is "What important truth do few people agree with you on"? His answer is; "Most people think that the world will be defined by globalization, but the truth is that technology matters more".

Don't get me wrong, I LOVE technology, but I think the future of the world will be defined by MEANING -- the West won't survive Islam (or the next "meaningful opponent") if we don't define a meaning and purpose for our existence -- and yes, expansion. To have a purpose, you have to believe, and if you believe, you believe that others would be served by believing. "I'm OK, You're OK" is not a meaningful philosophy!

I loved this line: "Brilliant thinking is rare, but courage is in shorter supply than genius". Again, it IS TODAY, because bowing to the "standard PC position" is more important than it was prior to the Reformation! Modern thought turns smaller and smaller molehills into mountains -- see NC!

My top favorite big ideas of the book are:

1) Monopoly is GOOD, competition is BAD. (in a static world, monopoly would be bad) I'm not going to argue the whole position here, but he does it very well. "The history of progress is the history of a better monopoly business replacing incumbents".  Think about it -- when Apple came along and created the expensive iPhone, people got violent in waiting lines to get at it. THAT is monopoly power, and you in fact WANT it -- badly, and it is the only way that our world will improve (technology wise).  "Creative monopolists give customers more choices by adding completely new categories of abundance to the world".

2). You are not a lottery ticket --  but first a couple one liners (I love one-liners!) "Elite students climb confidently until they reach a level of competition sufficiently intense to beat their dreams out of them."  ... thus,  "All Rhodes Scholars had a great future in their past"

" ... if you expect an indefinite future ruled by randomness, you'll give up on trying to master it. Indefinite attitudes to the future explain what's most dysfunctional in our world today. Process trumps substance..."

HELLO -- see "diverse financial portfolio", "well rounded education", etc, etc.

He covers 4 basic global attitudes and makes EXCELLENT cases for each:

• Indefinite Pessimism -- something bad is going to happen but not sure what. This is where Europe is "Europeans just react to events and hope things don't get worse". 
• Definite Pessimism -- The future is bleak and we know why. China is the prime example -- they know they are copying, they don't see how they can innovate their way to true prosperity, so they try to get their money out of the country. 
• Definite Optimism -- The future is bright and we know why. Western Civilization from the 17th century to the Moon Landing. 
• Indefinite Optimism -- The future is bright but we have no clue why. "He expects to profit from the future but sees no reason to design it concretely". The United States today.  "Indefinite optimists are so used to effortless progress that they feel entitled to it". "A whole generation learned from childhood to overrate the power of chance and underrate the importance of planning". 

For those of you that were sentenced to serve in an institution like IBM for some period of time, there is this: "...arguing over process has become a way to endlessly defer making concrete plans for a better future".  Oh, and you can "reorg" and have new buzzwords too! ;-) 

It's hard to believe this review is getting long. The whole book is a small 195 pages and I'm really only covering the first 75! IMHO, unless you are doing a startup, you COULD skip the last 90 or so pages, but that is not what I recommend. 

I'll close with what I think might turn out to the biggest mistake of human history so far -- Darwinism. "Actually, almost everybody in the modern world has already heard an answer to this question [how Indefinite Optimism MIGHT work] progress without planning is what we call "evolution"". 

Thiel goes on to point out that we may have a good deal more faith in this concept than is warranted. As I've pointed out, "it evolved" has become the modern answer to "it's God's will!", and while Western Civilization was optimistically marching to the real "God's Will" from the Reformation to the Moon Landing, we haven't really "evolved" all that well since -- or as Thiel puts it. 

"The smartphones that distract us from our surroundings also distract us from the fact that our surroundings are strangely old: only computers and communications have improved dramatically since midcentury."

He summarizes on Darwinism ... "Darwinism may be a fine theory in other contexts, but in startups, intelligent design works best". Startups don't have a billion years to get it right ... does Western civilization?

I'm NOT doing the book justice -- he has some great stuff on "power laws",  computer "substitution" vs man / machine partnership (his company Palantir), what founders of companies (or lots of things) ought to be like, and some great thoughts on what kinds of futures we may be choosing from as we check our smartphones.

READ IT!

Executive Qualities

The following showed up on a tech website today and I think they are pretty accurate. I'd rate Honesty and Intelligence at the top with Passion 3rd, but he didn't say there were in order. I disagree about the "innate leadership"--sure, some people have more God given ability in one or more of these areas than others, but ANYONE can improve on ALL of them.

What if you don't want to be an executive? Well, then the competition is still reduced a bit, but I'd argue that all of these are just fine in anything you want to do. Marriage, parenting, friendship, church, education--you name it. It is a list worth thinking about from time to time. The other point is that "ruthless", "dishonest", "greedy" or "conceited" aren't on there anywhere no matter what the American Media often has to say about business. Are all executives "wonderful"? Certainly not, but the characteristics listed strike a person that has spent 29+ years in corporate life as being the general case.

From CNET Train Wreck Blog

1. Passion. Driven to get the job done and do it right; passion for one's function, the marketplace, the company's product, work in general; high energy level
2. Intelligence. There's no substitute for intelligence, with emphasis on insight, analysis of complex problems, deductive reasoning, out of the box thinking
3. Fearless. Willing to take risks, embrace new challenges, make mistakes, and say what's on one's mind without fear of consequences; opposite of CYA mentality
4. Leadership. Innate ability to motivate people to willingly do one's bidding, especially when there's no direct benefit for them to do so
5. Can-do attitude. Simple put, everything is "no problem;" somehow finds a way to make it happen with minimal supervision; respect for "the customer"
6. Work ethic. Committed to working long and hard for the fulfillment of a job well done; respect for business and work; clarity in knowing right from wrong
7. Integrity. Understanding the importance of meeting commitments, on schedule and on budget; plus following up and keeping one's word
8. Flexibility. Easy to work with, willing to take on new responsibilities without clear personal benefit and without whining about it; willing to take one for the team
9. Humility. Willing to do what it takes for the team and credit others; intuitive understanding of the value of Karma in the business world
10. Honesty. Honest, straightforward, strong moral fiber; tells the truth regardless of consequences; goes hand-in-hand with fearless and strong work ethic

The Innovators Solution

An excellent business book by Clayton Christenson and Michael Raynor is an excellent business book on innovation in business and the forces that drive companies to take certain business actions that nearly insure their demise unless they constantly innovate. The book covers both the issues and the methods to combat the problems.

The book opens with some remedial coverage of "The Innovators Dilemma". As companies become successful, the natural drive is to move "up market" where profits are better. They focus on the high end, really listen to and provide for those customers, and eventually lose the lower end of the market as their products are "too good" (expensive, complicated, large, etc) for the bulk of the market, and they are focused only on their most profitable customers.

The business becomes expert at "sustaining innovation"--better performance, added features, new hardware, more options, different models, etc. all of which hone the product, and are generally very predictable. The business forgets completely about messy "disruptive innovation", that DOESN'T bring better products to customers in known markets, but rather attempts to provide products that are not as good as existing products, but provide advantages in cost, ease of use, scale, targeting, or other areas that will enable the product to compete against non-consumption (completely new customers), or less demanding customers. PC, Linux, etc. A nice case history of integrated mills vs mini mills is presented.

There was a discussion about people and companies having "jobs" that need to get done and they are looking for a product or service that they can "hire" to do that job. The item for the market researcher to go after is the CIRCUMSTANCE, not the CUSTOMER. "Innovations that make it easier for customers to do what they weren't trying to do before must compete against customers' priorities. This is very hard to do."

"Managers often segment markets along the lines for which the data are available, rather than in ways that reflect the things that customers are trying to get done." (think of the drunk that lost his billfold in a field looking for it under a street-lamp because the light is better there!) Rather than doing that, look at four keys to new market disruption (competition against non-consumption):

1. Target customers are trying to do a job but they lack money or skill.
2. The customer will compare your product against having no solution.
3. You can deploy a solution that is simple, convenient and foolproof (relative to what they have)
   
4. The product creates a whole new value network. (new consumers purchase the product through new channels)

There is an interesting discussion of modular vs interdependent architectures. As technologists, this makes pretty easy sense--a "fully custom solution" that has a lot of dependencies can be faster, BUT, it is much less flexible, and requires more to be done in a single organization. A modular approach is more one size fits all, and not as heavily optimized. Companies that build specialized integrated things will "overshoot", and their products will become "too good" for the mass market. One will hear employees cursing customers with: "Why can't they see that our product is better than the competition? They are treating it like a commodity!" IBM's PC experience is used as an example of a big company getting burned on dealing with modular vs interdependent architecture.

"Whenever commoditization is at work somewhere in the value chain, a reciprocal process of de-commoditization is at work somewhere else in the value chain." When your product is commoditized, you lose the ability to differentiate, and thus revenue--the company has to follow Gretzky and "develop the intuition for skating not to where the money presently is in the value chain, but to where the money will be.". The six steps of commoditization are:

1. Company creates a product with a proprietary architecture that is a hit.
2. Company overshoots the lower tier customers in market.
3. Basis of competition changes to "good enough"
4. Modular architecture solutions arise that better meet needs
5. The industry DIS-integrates (meaning products made up of modular commodities)
   
6. No longer possible to differentiate products on other than price.

De-Commoditization:

1. Low-cost commodity producers drive out high-cost incumbents -- moving ever up-market.
2. Because key performance defining subsystems become the constraint, they become important non-commodities
   • EG PC OS for MS, Processor for Intel, Graphics cards for ATI, vs "Computer" for IBM
3. Specialization / differentiation moves to the module level (graphics card)
4. Leading sub-system providers now differentiated
5. This sets up the next round of commoditization.

"Companies that are positioned at a spot in the value chain where performance is not yet good enough will capture the profit." ..."To the extent that an integrated company such as IBM can flexibly couple and de-couple it's operations, rather than irrevocably sell off operations, it has a greater potential to thrive profitably for an extended period than does a non-integrated firm such as Compaq."

"Core competence, as it is used by many managers, is a dangerously inward looking notion. Competitiveness is far more about doing what customers value than dong what you think you are good at. Staying competitive necessarily requires a willingness to learn new things rather than clinging hopefully to the sources of past glory. The challenge for incumbent companies is to rebuild their ships at while at sea, rather than dismantling themselves plank by plank while someone else builds a new, faster boat with what they cast overboard as detritus."

"We don't even question who makes the dresses in Talbot's, the sweaters for Abercrombie&Fitch, or the jeans at Gap and Old Navy. Much of the apparel sold in these channels carries the brand of the channel, the the manufacturer."

The RPV Framework:

• Resources - The people that can successfully lead sustaining innovation are almost certainly the wrong people to lead disruptive innovation. The issue isn't so much "success" as the history of willingness to wrestle with nasty problems and learn the right answers.
• Processes - "How an organization transforms inputs into things of greater value". "If that organization has not repeatedly formulated plans for competing in markets that do not yet exist, it is safe to assume that no processes for making such plans exist."
• Values - "An organizations values are the standards by which employees make prioritization decisions". "values often define constraints--they define what the organization cannot do.". The key value is overhead/financial model. Money is the fuel of business just like gas is the fuel of your car. So much of it is required for the business to operate as it currently does, and THIS business can't operate in a cost structure that won't support that (but one with a different cost structure CAN, and even be very profitable. Think Wal-Mart vs local hardware store)
  

"The requirements of an innovation need to fit with the host organizations processes and values or the innovation will not succeed." It is a bit like "transplant rejection" in medicine. "Organizations cannot disrupt themselves." A sobering thought for business organizations, since disruption is inevitable, they MUST break off units with different financial models if they seek to survive.

"Be patient for growth, not for profit.". Big companies with the wrong cost structure tend to do the reverse with disruptive business. It CAN work (Amazon is the counter example), but in general it is the model to be profitable that is what needs to be arrived at, not just "growth". It is too easy for the people to kid themselves by "losing a bit on each unit and assuming they will make it up in volume."

A principal refrain of this book is that blindly copying the best practices of successful companies without the guidance of circumstance-contingent theory is akin to fabricating feathered wings and flapping hard. Replicating their success is not about duplicating their attributes; it's about understanding how to generate lift (profit)."

This is a top tier business book--not a lot of filler, pretty concrete and easy to understand. Good way to get some insight into some of the core issues that build and destroy huge corporations.

Good To Great

I read this Jim Collins book a while back, but re-read as part of my recent class at work. It is a book that can apply to personal life, school, church, or any organization as well as to a business.

While one can take this book as a "cookbook", it is clear that just because you do all the things here, there is no guarantee you will build a great company ... just as following a recipe doesn't guarantee a great dining experience. These elements are just things that can increase the odds of making that leap. Following these ideas is like buying a lottery ticket to greatness.

The main ideas are:

1. CREATE Level 5 Leadership from within - A leader that "blends extreme personal humility with intense professional will" for the team/business, not for themselves. Darwin Smith of Kimberly-Clark paper and the decision to "Sell the Mills", a historical profit center of the business, and take on Procter&Gamble in the consumer paper products industry is a great example. Note; level 5 leadership at the team, area, organization, site, division can make a HUGE difference even without having it at the top, although the top can have a huge influence.
   
2. First Who - Then What - If you have the right people, you can do pretty much anything, and if you have the wrong people, you can do very little but manage the wrong people. The phrase "get the right people on the bus" is brought up a lot. Have a "strong and deep team" rather than a "genius with a thousand helpers model". Put your best people on your best opportunities, not your biggest problems. You want people who will argue and debate furiously, but line up once the decision is made regardless of personal interest (level 5 followership?).
   
3. Confront the Brutal Facts, yet never lose faith -This certainly applies to life as well as work.

   The core concept is "The Stockdale Paradox". James Stockwell was the highest ranking US officer imprisoned in North Korea from '65-'73. He said: "I never lost faith in the end of the story. I never doubted not only that I would get out, but also that I would prevail in the end and turn the experience into the defining even of my life, which, in retrospect, I would not trade". He was asked who it was that gave up, and he responded "Oh, that's easy, the optimists". The reason was that they always set some deadline like "we will be out by Christmas", and then "we will be out by Easter", and eventually they died of a broken heart.

   "You must never confuse faith that you will prevail in the end--which you can never afford to lose, with the discipline to confront the most brutal facts of your current reality, whatever that might be."

   From Collins:"Life is unfair--sometimes to our advantage, sometimes to our disadvantage. We will all experience disappointments and crushing events somewhere along the way, setbacks for which there is no "reason", no one to blame. It might be disease; it might be injury;it might be an accident;it might be losing a loved one;it might be getting swept away in a political shake-up;it might be getting shot down over Vietnam and thrown into a POW camp for eight years. What separates people, Stockdale taught me, is not te presence or absence of difficulty, but how they deal with the inevitable difficulties of life."

   There must be a climate in which there is a DRIVE to get and face the truth the key principals for that listed were.
   

   1. Lead with questions, not answers
   2. Engage in dialog and debate, not coercion
   3. Conduct autopsies without blame
   4. Build "red flag mechanisms" to information into information that can't be ignored.
   
   
4. Hedgehog concept - Foxes pursue many ends at the same time and see the world in all it's complexity. Hedgehogs simplify the complex world into a single, simple organizing idea or principle that guides everything.
   
   1. What can we be the best in the world at?
   
   
   2. What drives our economic engine?
   
   
   3. What are we deeply passionate about?
   
   
5. A Culture of Discipline - "Most companies build their bureaucratic rules to manage the small percentage of the wrong people on the bus". Freedom and Responsibility in a framework -- the example of the air traffic control system and FAA rules, but the ultimate responsibility with the pilot. Start a "stop doing list". "Most of us lead busy but undisciplined lives. We have ever-expanding 'to do' lists, trying to build momentum by doing, doing, doing--and doing more. And it rarely works. Those who built the good-to-great companies, however, made as much use of "stop doing" lists as "to do" lists."
6. Technology Accelerators - Only technology that fits with the hedgehog concept is used. Technology by itself is never the cause of either greatness or decline.
7. Flywheel and the Doom Loop -- It is the practice that counts, not the big game.
   1. Level 5 leader steps forward with hedgehog concept that organization buys.
   2. right people on the bus, wrong people off
   3. make some key successes ... SUCCEED ... even if it is made up a bit!
   4. more people line up when they see the results
   5. REPEAT - REFINE - REPEAT - REFINE ....
      
   
   

The New Business Normal (NBN)

The subject book by Michael W. Wright can be thought of as the executive summary of "The World Is Flat" by Thomas Freidman also here, and here. The Friedman book has become a "standard", but it is quite long, quite repetitive, and short on solutions.

A key paragraph from the Preface lays it out:

The global landscape we have painted seems intractable; we have embraced a the term first introduced into common business use by Roger McNamee, the "New Normal." This landscape is harsh and forbidding, one that will render useless any attempt to palliate through cliche' or dumbing down through generic format. We offer much content along a "how-to" path and cite many examples of successful navigation. But the main mission of the book is to map the scale (size) and scope (diversity) of the landscape. Any organization has to have a clear understanding of its present to divine its future. We we have done is illuminate the time and terrain between today and tomorrow.

The book opens with some key one-liners to remember. Some key ones that stuck with me were:

• The rule of three prevails. This essentially means that in a finite market three or fewer players will own at least 70% of the market share. Think of the top hamburger company in the world. The 2nd? How about the third? No doubt McDonalds was easy, maybe you picked a 2nd, by the 3rd, the basic answer is "who cares"?
• The old comparison is "have or have not", the new comparison is "know or know not". The only "security net" that anyone has in the NBN is knowledge.
• Dual-income households are an econimic necessity. Humorously, the new "trophy wife" is a PH. D. from China with her own business!
• Value has migrated from the product to the experience. Customers what the value of the experience without the responsibility or burden of product ownership.
  
• The basic level of human existence is at a higher level of anxiety for all. Everyone can be both in their own universe and connected all the time (internet, cell phone, iPod)
• Achievement depends on successful integration and marshalling of groups of varied interests.
  
• In the NBN a company will not let anyone get between them and their customer. "Co-destiny" with the customer is potentially the only remaining "business differentiator".
• The cry of today is "What are we good at?". The cry of tomorrow will be "What do we need to be good at?".
  
• Competitive advantage revolves around highly skilled people able to share information quickly and effectively.
• In the NBN, two discernible workforces have broadly taken shape: the under-fifties and the over-fities.
• Knowledge workers will eventually become the largest single group of older Americans in the workforce.
• The NBN for corporations is to innovate and manage the creation, but outsource its execution and administration.
• Asian companies see innovation as a process, not a spark of genius. They see change as an opportunity and are willing to abandon their past to create the future.

I could go on, but I think those are the biggest keys. What it all means to me is:

1. Success has always meant dealing directly with reality, taking risks, being flexible, and making correct moves (changes). The only difference now is that is happening faster and all over the globe.
2. Better communication and transportation means that the playing field is wider. That means greater opportunity and greater risk. Being "the best in the neighborhood or the best in town" is no longer good enough. If the business isn't location dependent (haircuts, dining), then the market is global.
   
3. Loving what you do gets more and more critical since in order to compete, it is critical that the level of professional commitment to the task has to be high.
   

The book is only 126 reasonable print pages long. It is VERY well worth reading on your own.

Indefensible

I was forwarded a link to this screed entitled
"Fearless Leaders"
and asked to comment on it, and I thought it was a good subject for a blog entry.

My first thought is that if most Americans could get as excited about fighting terrorists as they are about fighting CEOs, we could likely look like a united nation to they world and our chances of success in the WOT would be greatly increased. The MSM and many on the left can find excuses for everything from suicide bombers to child molesters, but their hatred of guys that head up companies shows no bounds.

When one deals in numbers, it is very important to have perspective on what the numbers are being related to. The guy that hates CEOs wants to use the salary of the "average worker". How about comparing CEO salaries to other highly paid Americans? I mean, the guy that heads up a 300K person company can't really be considered "average" can he?

On Forbes 2005 list, George Lucas of Star Wars fame was #1 at $295 million, Oprah #2 at $225 million, Mel Gibson $185 M for 3, Bill Clinton was 89th, pulling down $6M for speaking, Dan Brown of DaViinci code made $76 Million, Kate Moss made $5 million for being beautiful and having her picture taken. Tiger Woods made $87 Million, and was #4. Nobody is writing nasty articles about these people and they certainly aren't creating nearly the returns, real products, or jobs that the companies that have high paid CEOs are. I don't mean to denigrate what any of them make. The market pays them too. If the market values pretty pictures of women as much as they value a CEO giving up their entire life for a number of years to head up a major corporation, that is OK with me. I don't claim to be as smart as the millions of customers and stockholders that end up deciding what CEOs should make. Who is it that we would pick that WOULD be as smart to set the "proper" limits?

Why is it though that so many people have a visceral self-righteous indignation over CEO salaries, but they are unbothered by a former president that walked the halls of power with his pants around his knees pulling down $6M a year for giving some speeches? I believe there are three basic reasons. The first is "spiritual". They see Slick Willie as "gifted". He is "special". Same thing for sports stars, authors, film makers. Those are "special gifts", and somehow "worthy". They can understand that Kate Moss is beautiful, Star Wars is creative, and it is very hard to put a white ball in a small hole, so the folks that are the best at it may as well get "huge money". They DON'T understand running a large corporation. They see it as "going to work". They go to work, the CEO goes to work, they can't understand what is different about his work to make it so highly paid. I'd think it may dawn on them that running a company that makes billions of dollars and employs 10's or 100s of K of people is harder than their job, but apparently not. It has become popular in this country to be clueless and outraged, and one of the things it is popular to be that on is CEO salaries.

The second reason is because they don't have emotional intelligence on economics. They believe in the "pie at the table" model of the economy, and figure if the CEO makes more they make less. Oddly, they don't seem to think of Tiger or Kate Moss eating their pie, apparently they see the "gifted" as dining on some other sort of pie. This lack of at least emotional understanding of economics goes back to childhood. We all are raised in some sort of a family. The head(s) of that family appear to be way rich and god-like to us as small children. They COULD get us all the toys we want when we are little, but don't. Worse, if there are siblings, we sometimes see that they allocate money "unfairly", ie. "they didn't give it all to us". We don't understand a lot, but we see "the pie" as of a fixed size and allocated under the control of powerful people. The author of this article, most of the MSM, and the majority of Americans operate with the economic emotions of a young child. Not surprising since the untruth has been drilled into them during all their schooling and continues to be reinforced in the media constantly. Their is a bitter joy in returning to childhood and feeling the outrage that someone else has gotten an unfair slice of YOUR pie, and you will have to do with less.

In reality, neither the world or US economy are fixed in size. In yr 2000 dollars, the US GDP per capita has grown from $22,716 in 1980 to $37,523 today. Just because someone else makes more doesn't mean that you or anyone else makes less. In fact, with growth, it often means that everyone else makes more. Japan, one of the countries pointed out as being better for lower CEO to worker pay multiple had only $29,400 of GDP per capita in 2005 by the same measure. Apparently, CEO pay is not hurting us or helping Japan if it is real results rather than feeling outraged that is important.

This GDP is also not allocated by "powerful people" like "Mom and Dad", it is allocated by a market. Were it allocated by powerful people with connections as was attempted to be driven into my brain as a kid, I'd likely be doing something with turkeys in Barron WI for $10 an hour and complaining bitterly about the "unfairness of the system". Most all of us would overvalue our "fair pay", and undervalue it for others, especially those that make more than us. We all work hard, and are certainly worthy of more, while those that make more than us ought to be satisfied with a lot less than what they make, and just "love their jobs".

40% of the planet lives on something less than $1 a day, so a person making $109,500 is already making 300x that and by comparison is a "greedy CEO". There are millions of "greedy CEOS" in the US relative to 40% of the population of the planet. Is it true that the success of the US is taking money from those people? Hardly, in fact it does the reverse. The success of the US economy and system has created globalization, and it is provably the best "aid to poor nations" ever created in the history of the world, and while it works, it makes many Americans richer as well.

The third reason that people feel resentment about CEO jobs is because they don't understand that getting to the CEO position is a lottery. We understand a lottery where everyone puts in a small amount of money for a very small chance to win a large sum of money. Getting to CEO is a lottery where a fairly large number of people have to work very hard for a very long time to have a very small chance of getting a special job. The payout for that very special job needs to be large enough to keep a significant number of people motivated over a long time in order to come up with the quality level of person needed to accomplish the task. Over time, the market for CEOs has factored that into CEO salary.

There are many reasons that folks with a left tilt hate that analysis. It asserts that the market works, competition works, some people are better suited to positions than others, even high pay can be rational, and a host of other "bad" things if your brain tells you that "everything should be level, we are all equal". Equal for opportunity, but not equal in gifts or outcomes I'm afraid. Those that can't stand the kind of diversity that matters, diversity of competence and outcome, are always going to find a reason to hate those that rise to the top.

We all hate seeing retirement at a young age go away. We hate losing our hair, losing our memory, and waking up stiff too, but we need to get used to all of them.
I've blogged on that at Retiring Models
Part of leadership is also letting people know about reality. CEOs work up to take a very specialized job, and their retirement is going to be different from that of an average worker, just like Tiger, Bill Clinton, or George Lucas. In our system, there isn't anything stopping you from being a CEO if you feel it is a "cushy job for high wages". I don't agree with you, but the great thing about a free country is that anyone can go out and go for the brass ring.

I don't want a CEO job at the salary they make even if it was offered to me. Corporations have to find CEOs from people that make much more than I do, and they have to compete for the best at least significantly on the basis of dollars. On the day that stockholders decide that lower CEO pay is an indicator of better stock performance, CEO pay will start to go down. Until that day, CEOs are going to get the same kind of money as great models, and ex-presidents speaking.