the freedom to think from first principles and real-world physics rather than having to accept the prevailing “wisdom.”

Because if you hire the right people and have big enough dreams, you’ll usually get there. And even if you fail, you’ll probably learn something important.

a few simple principles, first and foremost of which was to focus on the user.

Many incumbents—aka pre-Internet companies—built their businesses based on assumptions of scarcity: scarce information, scarce distribution resources and market reach, or scarce choice and shelf space.

The basis for success then, and for continual product excellence, is speed.

As already noted, experimentation is cheap and the cost of failure—if done well—is much lower than it used to be.

Typically, the most valuable knowledge workers are the ones who thrive in the straitjacketed world of corporate process, by building deep expertise in a narrow set of skills.

They don’t seek mobility; organizational status quo is where they excel.

They get bored easily and shift jobs a lot. They are multidimensional, usually combining technical depth with business savvy and creative flair.

operating processes have been biased toward lowering risk and avoiding mistakes. These processes, and the overall management approach from which they were derived, result in environments that stifle smart creatives.

She is her own focus group, alpha tester, and guinea pig.

Her perspective is different from yours or ours. It’s even occasionally different from her own perspective, for a smart creative can play the perspective chameleon when she needs to.

She is self-directed creative. She doesn’t wait to be told what to do and sometimes ignores direction if she doesn’t agree with it.

But they all must possess business savvy, technical knowledge, creative energy, and a hands-on approach to getting things done. Those are the fundamentals.

because culture and success go hand in hand, and if you don’t believe your own slogans you won’t get very far.

Smart creatives, though, place culture at the top of the list. To be effective, they need to care about the place they work.

The smart approach is to ponder and define what sort of culture you want at the outset of your company’s life.

What do we care about? What do we believe? Who do we want to be? How do we want our company to act and make decisions? Then write down their responses.

Jack Welch said in Winning: “No vision is worth the paper it’s printed on unless it is communicated constantly and reinforced with rewards.”27

When offices get crowded, they tend to get messy too.

Messiness is not an objective in itself (if it was, we know some teens who would be great hires), but since it is a frequent by-product of self-expression and innovation, it’s usually a good sign.

When it comes to the quality of decision-making, pay level is intrinsically irrelevant and experience is valuable only if it is used to frame a winning argument.

For a meritocracy to work, it needs to engender a culture where there is an “obligation to dissent”.38 If someone thinks there is something wrong with an idea, they must raise that concern. If they don’t, and if the subpar idea wins the day, then they are culpable.

They prefer a flat organization, less because they want to be closer to the top and more because they want to get things done and need direct access to decision-makers.

Jeff Bezos, Amazon’s founder, at one point had a “two-pizza team” rule,41 which stipulates that teams be small enough to be fed by two pizzas.

Small teams get more done than big ones, and they spend less time politicking and worrying about who gets credit.

Determine which people are having the biggest impact and organize around them.

Internal teams work in much the same way: You want to invest in the people who are going to do what they think is right, whether or not you give them permission.

As the old saying goes: If you want something done, give it to a busy person.

There is no room for knaves. And generally, in our experience, once a knave, always a knave.

(Tom Peters: “There is no such thing as a minor lapse of integrity.”)

Marissa Mayer, who became one of Silicon Valley’s most famous working mothers not long after she took over as Yahoo’s CEO in 2012, says that burnout isn’t caused by working too hard, but by resentment at having to give up what really matters to you.46

We like this quote from American academic and former University of Connecticut president Michael Hogan: “My first word of advice is this: Say yes. In fact, say yes as often as you can. Saying yes begins things. Saying yes is how things grow. Saying yes leads to new experiences, and new experiences will lead you to knowledge and wisdom.… An attitude of yes is how you will be able to go forward in these uncertain times.”

A defining mark of a fun culture is identical to that of an innovative one: The fun comes from everywhere.

Lou Gerstner, who helped engineer a turnaround at IBM, notes in his book Who Says Elephants Can’t Dance?, “It’s been said that every institution is nothing but the extended shadow of one person.51

To do all this, you have to be crazy enough to think you will succeed, but sane enough to make it happen. This requires commitment, tenacity, and most of all, single-mindedness.

Leadership requires passion. If you don’t have it, get out now.

Giving the customer what he wants is less important than giving him what he doesn’t yet know he wants.

When you base your product strategy on technical insights, you avoid me-too products that simply deliver what customers are asking for. (Henry Ford: “If I had listened to customers, I would have gone out looking for faster horses.”)65

In the Internet Century, the objective of creating networks is not just to lower costs and make operations more efficient, but to create fundamentally better products.

These companies assembled existing technology components in new ways to reimagine existing businesses.

Whereas the twentieth century was dominated by monolithic, closed networks, the twenty-first will be driven by global, open ones.

Platforms generally scale more quickly when they are open. Look at the biggest platform of them all, the Internet.

But generally it means sharing more intellectual property such as software code or research results, adhering to open standards rather than creating your own, and giving customers the freedom to easily exit your platform.

With open, you trade control for scale and innovation.

A final thought on defaulting to open is the concept of user freedom, a practice that is the opposite of customer lock-in:

As Nietzsche wrote in Thus Spake Zarathustra: “You must be proud of your enemy; then your enemy’s successes are also your successes.”87 Be proud of your competitors. Just don’t follow them.

Iteration is the most important part of the strategy. It needs to be very, very fast and always based on learning.

Passionate people don’t wear their passion on their sleeves; they have it in their hearts. They live it. Passion is more than résumé-deep, because its hallmarks—persistence, grit, seriousness, all-encompassing absorption—cannot be gauged from a checklist.

In our experience raw brainpower is the starting point for any exponential thinker. Intelligence is the best indicator of a person’s ability to handle change.

These “learning animals” have the smarts to handle massive change and the character to love it. Psychologist Carol Dweck has another term for it. She calls it a “growth mindset.”95

But if you have a growth mindset, you believe the qualities that define you can be modified and cultivated through effort. You can change yourself; you can adapt; in fact, you are more comfortable and do better when you are forced to do so.

A smart generalist doesn’t have bias, so is free to survey the wide range of solutions and

Another crucial quality is character. We mean not only someone who treats others well and can be trusted, but who is also well-rounded and engaged with the world. Someone who is interesting.

The most important skill any business person can develop is interviewing.

(“What books are you reading right now?”).

The best smart creatives often want to leave so they can go start something on their own. Don’t discourage this, but do ask them for their elevator pitch. (“Elevator pitch” is venture capital–speak for “you have thirty seconds to impress me with your business idea.”) What is your strategic foundation? What sort of culture do you envision? What would you tell me if I were a prospective investor?

As Reid Hoffman, Jonathan’s former colleague at Apple and founding CEO of LinkedIn notes, “Just because a job ends, your relationship with your employee doesn’t have to.… The first thing you should do when a valuable employee tells you he is leaving is try to change his mind. The second is congratulate him on the new job and welcome him to your company’s alumni network.”

Career development takes effort and forethought—you need to plan it.

Think about your ideal job, not today but five years from now. Where do you want to be? What do you want to do? How much do you want to make? Write down the job description: If you saw this job on a website, what would the posting look like? Now fast forward four or five years and assume you are in that job. What does your five-years-from-now résumé look like? What’s the path you took from now to then to get to your best place? Keep thinking about that ideal job, and assess your strengths and weaknesses in light of it. What do you need to improve to get there? This step requires external input, so talk to your manager or peers and get their take on it. Finally, how will you get there? What training do you need? What work experience?

Figure out how to use the various tools at your disposal to tap into the sites and authors you respect. Create circles of other like-minded smart people and swap books and articles.

This from our estimable former colleague Sheryl Sandberg: “It is the ultimate luxury to combine passion and contribution. It’s also a very clear path to happiness.”

Or you could take a more deliberate approach. Adjust your course. Make your five-years-out ideal job closer to your if-only-I-could dream job, yet attainable from your current path. We’ve seen even this simple act of setting the right goal turn around people’s careers.

One of the most transformative developments of the Internet Century is the ability to quantify almost any aspect of business. Decisions once based on subjective opinion and anecdotal evidence now rely primarily on data.

Edward Tufte, the uber-guru of data presentation and visualization, advocates putting more data on fewer slides: “Visual reasoning usually works more effectively when relevant information is shown side by side. Often, the more intense the detail, the greater the clarity and understanding.”123

Bobblehead yessers are different from your classic “yes-men” because, unlike them, bobbleheads have a nasty tendency to complain and whine and not do or support the very thing to which they just agreed as soon as they walk out of the meeting.

Tom Peters would call Bill’s attitude in this situation a “bias for action,” and his book In Search of Excellence lists it as a top common attribute of the companies he studied.130

Have patience, information, and alternatives. P is especially important. You want to wait as long as possible before committing to a course of action.

But don’t be a slave to a sense of urgency. Maintain flexibility until the last possible moment.

If you attend a meeting, attend the meeting. Multitasking doesn’t work. If you are in a meeting and using your laptop or phone for something not related to the meeting, it’s obvious your time is better spent elsewhere.

(Bill Gates in 1999: “Power comes not from knowledge kept but from knowledge shared. A company’s values and reward system should reflect that idea.”)

John Seely Brown, the former director of Xerox’s Palo Alto Research Center, once said, “The essence of being human involves asking questions, not answering them.”

Good news will be just as good tomorrow, but bad news will be worse.

Eric calls our approach to transparency a “climb, confess, comply” model. Pilots learn that when they get in trouble, the first step is to climb: Get yourself out of danger. Then, confess: Talk to the tower and explain that you screwed up and how. Finally, comply: When traffic controllers tell you how to do it better next time, do it!

Conversation is still the most important and valuable form of communication, but technology and the pace of work often conspire to make it one of the rarest.

Sociologists have a name for this phenomenon (as do anthropologists and mixologists): laziness.

Most every company has “tribal elders” who possess unique expertise in their field and a deep knowledge of the organization.

Yes, that does happen, but it turns out that most rock stars have very little patience for people wasting their time and they make doing so a very unpleasant experience. The inexperienced smart creative who does it once quickly learns not to do it again.

In most aspects of life, you need to say something about twenty times before it truly starts to sink in.145

To get this right, you first need to know what the core themes are.

People will like it when you take off the blinders and talk about a wider variety of things.

Say yes to all forms of communication.

Tell the truth, be humble, and bank goodwill for a rainy day.

One of Eric’s most basic rules is sort of a golden rule for management: Make sure you would work for yourself. If you are so bad as a manager that you as a worker would hate working for you, then you have some work to do. The best tool we have found for this is the self-review: At least once per year, write a review of your own performance, then read it and see if you would work for you.

Respond quickly. There are people who can be relied upon to respond promptly to emails, and those who can’t.

When writing an email, every word matters, and useless prose doesn’t. Be crisp in your delivery. If you are describing a problem, define it clearly. Doing this well requires more time, not less. You have to write a draft then go through it and eliminate any words that aren’t necessary. Think about the late novelist Elmore Leonard’s response to a question about his success as a writer: “I leave out the parts that people skip.”147 Most emails are full of stuff that people can skip.

Make it easy to follow up on requests. When you send a note to someone with an action item that you want to track, copy yourself, then label the note “follow up.” That makes it easy to find and follow up on the things that haven’t been done; just resend the original note with a new intro asking “Is this done?”

Help your future self search for stuff. If you get something you think you may want to recall later, forward it to yourself along with a few keywords that describe its content. Think to yourself, How will I search for this later? Then, when you search for it later, you’ll probably use those same search terms.

(Champion racecar driver Mario Andretti: “If everything seems under control, you’re just not going fast enough.”)152

“If everything seems under control, you’re just not going fast enough.”)152

Apple and Google both operate in industries with extraordinarily fast product life cycles.

For something to be innovative, it needs to be new, surprising, and radically useful.

But usually there’s a reason the market is empty: It’s not big enough to sustain a growing venture. It still may be a good business opportunity—someone must make money off of all those niche products we see in the SkyMall catalog—but if you want to create an environment of innovation, it’s better to look for big markets with huge growth potential.

As Udi told us when recounting his Yahoo experience, “Innovative people do not need to be told to do it, they need to be allowed to do it.” In other words, innovation has to evolve organically.

It is the final destination of a path that starts when ideas spawn like mutations from a primordial ooze and traverse a long, perilous route from inception to fruition. Along the way, stronger ideas accumulate believers and momentum, and weaker ones fall to the wayside. There is no process by which to implement this evolution; its defining characteristic is its lack of process.

To paraphrase Darwin from The Origin of Species: As many more [ideas] are born than can possibly survive; and as, consequently, there is a frequently recurring struggle for existence, it follows that any [idea], if it vary however slightly in any manner profitable to itself, under the complex and sometimes varying conditions of life, will have a better chance of surviving, and thus be naturally selected.159

All companies that want to be innovative, which is to say all companies, need to start by creating an environment where the different components of creation are given free rein to collide in new and interesting ways, and then give these new creations the time and freedom to evolve and live, or—much more often—stagnate and die.

“The first follower is what transforms a lone nut into a leader.”

Robert Noyce, cofounder of Fairchild Semiconductor and Intel, said, “Optimism is an essential ingredient for innovation. How else can the individual welcome change over security, adventure over staying in a safe place?”162 Hire people who are smart enough to come up with new ideas and crazy enough to think they just might work. You need to find and attract those optimistic people, then give them the place to create change and adventure.

Product excellence is the only way for a company to be consistently successful, so our prime directive when it comes to product strategy is to focus on the user (while not interfering with the internal development of alien civilizations).

Give the wrong people a big challenge, and you’ll induce anxiety. But give it to the right people, and you’ll induce joy.170 They enjoy rising to the challenge for the sake of it, but also, as sociologist and management guru Rosabeth Moss Kanter has pointed out, for the very real benefits it can bring: new skills, new connections with colleagues in the field, enhanced reputation—what economists would describe as investing in their human capital.

First, a good OKR marries the big-picture objective with a highly measurable key result.

percent… run a half marathon in under two hours),

Competitors are everywhere in the Internet Century, and chasing them (as we noted earlier) is the fastest path to mediocrity.

Ten percent also works because creativity loves constraints.

A lack of resources forces ingenuity.

Steve Jobs maxim that “you have to be run by ideas, not hierarchy.”

Our constant advice to anyone who wants to launch a 20 percent project is to start by building a prototype, because that’s how you get people excited about the project. Coming up with an idea is pretty easy. Getting a few of your colleagues to join your project and add their 20 percent time to your 20 percent time is a lot harder. This is where the Darwinian process begins.

The most valuable result of 20 percent time isn’t the products and features that get created, it’s the things that people learn when they try something new.

To innovate, you must learn to fail well. Learn from your mistakes: Any failed project should yield valuable technical, user, and market insights that can help inform the next effort.

Author and professor Nassim Taleb writes about making systems that are “antifragile”: They don’t just survive failures and external shocks, they get stronger as a result.192

Mulla Nasrudin, the thirteenth-century wise fool of Sufi lore, seconds the notion: “Good judgment comes from experience; experience comes from bad judgment.”194

As Jeff Bezos points out, “Just by lengthening the time horizon, you can engage in endeavors that you could never otherwise pursue. At Amazon we like things to work in five to seven years. We’re willing to plant seeds, let them grow—and we’re very stubborn. We say we’re stubborn on vision and flexible on details.”195

The rate of technology-driven change outpaces our ability to train people in new skills, putting tremendous pressure on entire classes of workers and the economic structure of many nations.

And what can businesses and individual entrepreneurs do to survive and thrive during periods of disruption?

The definitive preindustrial nineteenth-century institution was The Household;

After the industrial revolution, the definitive twentieth-century institution became The Corporation.

In the twenty-first century, The Corporation as a hub of economic activity is being challenged by The Platform.

In contrast, a platform has a back-and-forth relationship with consumers and suppliers. There’s a lot more give-and-take.

And at an individual level, people within big companies aren’t rewarded for taking risks, but are penalized for failure. The individual payoff is asymmetrical, so the rational person opts for safety.202

The very nature of mature companies is to be risk-averse and to attack big change like a body attacks an infection.

Whereas Web 1.0 let you read and buy things and Web 2.0 let you do things, the social web let you talk about and share things.

Vic had seen the potential of smartphones early on, and had helped build the team that pushed Google to make “mobile first” a common mantra.

What would it mean to Google when the dominant use of the web was as a social platform? Could the social web make search obsolete? Sometimes the most effective way to help change and innovation outrun the antibodies of corporate entropy is a simple one: Ask the hardest question.

(Harvard Business School Professor and business consultant Clayton Christensen: “I keep my attention on the questions I need to ask so I can catch the issues of the future.”)

There are solid reasons underlying our optimism. The first is the explosion of data and a trend toward the free flow of information.