Dark Pools of Money In Politics

I’m interested in applying data journalism to research campaign contributions. Here are some curations pertaining to money in politics – included are videos, readings, and tools to explore campaign finance contributions.

Start, by geting a quick intro to campaign finance via wikipedia here.

Then learn about the Federal Election Commission (FEC).

Wrap up by learning about independent expenditure-only committees (i.e. Super Pacs) here,  here, here , & here.

Now that you know the basics of campaign finance watch the following videos:

Bill Moyers – Interviews Two Journalists on Dark Money in Politics

Laurence Lessig @ Ted – We The People & Republic Must Reclaim

To learn more about Citizen United read & watch the following:

A Summary of Citizens United vs FEC

The Supreme Court’s Docket -i.e. all files relating to the case

Video: Citizen United Decision & Future Campaign Finance Laws - Political scholars examined the consequences of the Supreme Court’s Citizens United v. Federal Election Commission decision on recent elections. They also responded to questions from the audience.

So how are journalists & watchdogs tracking campaign finance? 

Let’s start with this video from the Sunlight Foundation about the role of using technology to track contributions.

Investigative Pieces Exploring Political Contributions:

First start with the Federal Election Commission Campaign Disclosure Portal.

Next, here are some awesome investigative pieces by ProPublica on political contributions:

1. Buying Your Vote – Dark Money & Big Data

2. How Dark Money Flows Through Koch Brothers Network

3. Who’s Making Money From All This Campaign Spending

Also, read the following reports from the Campaign Finance Institute

Finally, here is a list of all the NYT’s coverage of campaign finance

Tools Used To Track Political Contributions & Campaign Finances:

Influence Explorer – By Sunlight Foundation - ”Connects the dots of political contributions on the federal and state level allowing you to track influence by lawmaker, company or prominent individual”

Foreign Lobbying Influence Tracker - By Sunlight Foundation & Propubica - ”digitizes information that representatives of foreign governments, political parties and government-controlled entities must disclose to the U.S. Justice Department when they seek to influence U.S. policy.”

Follow The Money - “The National Institute on Money in State Politics is the only nonpartisan, nonprofit organization revealing the influence of campaign money on state-level elections and public policy in all 50 states. Our comprehensive and verifiable campaign-finance database and relevant issue analyses are available for free through our Web site FollowTheMoney.org. We encourage transparency and promote independent investigation of state-level campaign contributions by journalists, academic researchers, public-interest groups, government agencies, policymakers, students and the public at large.”

Maplight - “MapLight is a nonpartisan research organization that reveals money’s influence on politics in the U.S. Congress and in the California and Wisconsin state legislatures. We provide journalists and citizens with transparency tools that connect data on campaign contributions, politicians, legislative votes, industries, companies, and more to show patterns of influence never before possible to see. These tools allow users to gain unique insights into how campaign contributions affect policy so they can draw their own conclusions about how money influences our political system.”

Pacs by Open Secrets - This section lists campaign contributions by PACs and donations to PACs, broken down by sector, industry and unique PAC. Only groups that made contributions during the current or last two election cycles are listed here.


Entrepreneurial Lessons From Michael Bloomberg

I’ve been spending a significant amount of time learning about financial technology. Here are some of my favorite quotes from Michael Bloomberg’s book, “Bloomberg by Bloomberg


And, as I would learn later on in my life-at Salomon Brothers and in my own company-it’s the “doers,” the lean and hungry ones, those with ambition in their eyes and fire in their bellies and no notions of social caste, who go the furthest and achieve the most.

Life, I’ve found, works the following way: Daily, you’re presented with many small and surprising opportunities. Sometimes you seize one that takes you to the top. Most, though, if valuable at all, take you only a little way. To succeed, you must string together many small incremental advances-rather than count on hitting the lottery jackpot once.

I have always believed in playing as many hands as possible, as intelligently as I can, and taking the best of what comes my way. Every significant advance I or my company has ever made has been evolutionary rather than revolutionary: small earned steps-not big lucky hits.

Young people starting their careers today are too impatient for current compensation, at the expense of continuing their education and giving their jobs a chance. Get back to work. Forget the money today. There’s plenty of time for that later. Novices should go to the best firm they can get into-and then shut up and learn those few things they don’t happen to know already.

The difference between stubbornness and having the courage of conviction sometimes is only in the results.

Letting them define the rules is a sure way to come in second.

Work doesn’t expand to fill capacity-opportunity does!

Thinking and interpersonal communications skills have been, are, and will be keys to survival. Technology’s not going to change that. To prosper, work on your people-to-people relations more than your typing speed. Take a psychology course and one on how to use the Scientific Method rather than (or in addition to) a computer science course.

Being well-rounded, inquisitive, perceptive, logical, and communicative is more valuable than knowing a given sequence of buttons to push. In the future, technical details will matter less-big picture, more.

Our schools too often fail to teach logic and skepticism.

Forcing your children and proteges to go solo-and leaving them alone while they struggle as adolescents with relatively simple problems-is something parents and mentors must do. It’s not easy, but it’s necessary if they’re to survive later on their own.

Having a business career and raising a family create inherent conflicts. Investment of time is the primary controllable determinant of success in both.

Repetition builds instinct. I’m living proof. And preparation. I subscribe to the expression, “Stay ahead of the plane.” It basically means, “Do things now while you have the time, so you don’t have to later when you’re rushed.”
It’s always the little things that buy you a slight extra margin, that in turn saves your rear.

Three things usually separate the winners from the losers over the long term: time invested, interpersonal skills, and plain old-fashioned luck.


We just did what all great salespeople do: We presented everything we had, and then highlighted whatever facts enabled customers to convince themselves they were getting a good deal.

From John D. Rockefeller to Sam Walton (and ultimately to Mike Bloomberg, I hope), great financial success comes from starting businesses with concrete products in the real world, building jobs, creating value, and helping people.

Planning has its place; the actual thought process sometimes leads to great new ideas. But you can only accomplish what’s possible when you get there. Then, whatever your idea is, you’ve got to do more of it than anyone else-a task that’s easier if you structure things so that you like doing them. Since doing more almost always leads to greater accomplishments, in turn you’ll have more fun. And then you’ll want to do even more because of the rewards.

What did I have the resources, ability, interest, and contacts to do? I could provide a far more sophisticated system at a fraction of the price. Sharing expenses over many users would give me a distinct cost advantage. And if most firms used my data and analysis, I would be creating an industrywide standard, something which, for competitive reasons, the insiders themselves could never accomplish.

If you’re going to succeed, you need a vision, one that’s affordable, practical, and fills a customer need. Then, go for it. Don’t worry too much about the details. Don’t second-guess your creativity. Avoid overanalyzing the new project’s potential. Most importantly, don’t strategize about the long term too much

Consider banks and venture capitalists your worst enemies. They create doubt in entrepreneurs’ minds with their insistence on detailed game plans before they lend..

Selling is the only process we run simultaneously with development from the start. That gives us feedback as we build-and makes the customers part of the evolution process (they come to believe it’s their product)

By the time our rivals are ready with wires and screws, we are on version No. 10. It gets back to planning versus acting. We act from day one; others plan how to plan-for months.

From the beginning, I was convinced we were doing something nobody else could do. Nor was anyone else trying

Bloomberg found niches that Dow Jones and Reuters news didn’t fill. From the start, it was easier for us to add to our basic product what they provided, than for them to add what we built to theirs.

If you have to compete based on capital, the giant always wins. If you can compete based on smarts, flexibility, and willingness to give more for less, then small companies like Bloomberg clearly have an advantage. The world changes every minute, and you forget that at your peril.

Those enterprises that see new needs and react more quickly, win!

With every product, the greater its utility, the easier it is to use, the cheaper it costs-the more it’ll be used.

Dealings with a large, single-source supplier are always difficult to end. The seller invariably has back-door channels into its customer, which it can use to thwart change. The buyer fears the uncertainty of the new and mentally tries justifying the known devil. People feel threatened by the normal reexamination of practices that vendor-switching invariably instigates

I’ve always insisted on building a simple “do a few things” version of software up front. Most people are terrible at understanding and enunciating what they actually do day in and day out, and on what basis they make decisions. They’re even worse at defining what tools they would use in the future. But if you give them something they can see and touch, then both they and you can get experience as to a program’s utility and applicability, or at least have a common basis for enhancements.

Buyers won’t accept more complexity, change for change’s sake, or so many options that no normal person could possibly remember them without the multilanguage, tiny-print, incomprehensible instruction book on hand.
The junkyards are littered with examples of technology that were introduced simply to highlight the designer’s brilliance but ignored the customer’s capabilities and needs.

When is diversification appropriate? Only when it fits with what you already do.

Lack of competition is the equivalent of no peer review process. When the inevitable competitor arrives with a better way, the organization previously without a need to improve has grown so lazy it has trouble reacting.

Positioning ourselves to respond is what competition is all about, we have to enter each commercial fight with an advantage. I don’t believe that business battles should be even.

If that were the case, the odds wouldn’t be good for a company our size. Remember the math: The chance of coming out ahead in a fair contest is one in two. In consecutive tests, that chance becomes one in four, one in eight, one in sixteen, and so on. In other words, the likelihood that we will prevail five times in a row in a fair fight is only about 3 percent. That’s not a risk a small company like ours can afford to take. We don’t want fair fights. We want to go into contests with an advantage


Plan things out and work through real-life scenarios, selecting from the opportunities currently available. Just don’t waste effort worrying about an infinite number of down-the-road possibilities, most of which will never materialize.

As you discover you don’t know it all, force yourself to address the things you forgot, ignored, underestimated, or glossed over. Write them out for a doubting stranger who doesn’t come with unquestioned confidence in the project’s utility-and who, unlike your spouse, parent, sibling, or child, doesn’t have a vested interest in keeping you happy. Make sure your written description follows, from beginning to end, in a logical, complete, doable path. By now, you either know what you can know-or you don’t and never will. As to the rest, take it as it comes.

We had picked just the right project. It was big enough to be useful, small enough to be possible. Start with a small piece; fulfill one goal at a time, on time. Do it with all things in life.

But generally, projections regarding new, untried businesses are meaningless. The noise in the assumptions you have to make is so great, and the knowledge you have of strange areas so limited, that all the detailed analysis is usually irrelevant. We saw a need. We went ahead and filled it.

Generally though, deep pockets and strong stomach help when trying new things. Few innovations are accepted right away. You must bring changes along slowly, improving them over time, building an audience with persistence and repetition.

Companies in the end need direction, not discussion.

They study. They plan. They work toward getting consensus and approval and closure. They try to define it all up front, even specifying the end game from the beginning. Ridiculous! You can do a six-month software project in twelve months. You can probably do a twelvemonth project in two years. You cannot do two-year project, ever. Humans need to see results in time frames they can handle. A project takes too long when it consumes so much time to build that no one remembers who requested it, what specifically was ordered, what its purpose was, or even whatever happened to that since-departed person who initiated all this.

Describing the “how and when” forces them to face all those things they initially glossed over when they thought about the “what”-utility, cost, maintenance, data quality, redundancy, training, cooperation. They have to satisfy me, a novice.

Well-run organizations, whether commercial, political, educational, military, or philanthropic, have conceptual goals stated long in advance.


Journalists generally make lousy managers in the same way that lawyers, accountants, and consultants are sometimes better at advising than doing. Each of these professions requires great skill in gathering a bewildering array of information and providing the customer with an assessment of what it means. The very skills required to research and produce a discriminating, specific piece of analytical prose day in and day out are probably antithetical to the skills required to keep people working together.

We don’t appoint a manager at the beginning. We simply throw everyone interested into the deep end of the pool, as it were, and stand back.It becomes obvious very quickly who the best “swimmers” are. We just watch who people go to for help and advice. And later, when we formalize a management appointment, no one’s ever surprised.

We get more from each person by reducing the drudgery and enhancing creativity.

The leverage we gain from employing creative people and letting them do their own thing is incredible.

At Bloomberg, all we ask is that they come up with as many new ideas as they can think of (no matter how “crazy”), and do their best on the projects we assign. If a concept is flawed, the blame and pain rest with me. The credit for whatever’s right goes to them…

I’ve always thought titles are disruptive at best. They separate, create class distinctions, and inhibit communications.

We always have our offices in the best and most expensive parts of town while our competitors look for bargain space in the low-rent districts. It gets back to who you think is more important: your people or outsiders. I believe our people matter.
We handle perks differently, too. At Bloomberg, as you move up the organizational ladder and your compensation increases, you aren’t expected to work less and take more vacations. Quite the contrary. You’re more valuable, you get paid more, and your coworkers should get more out of you.

The increase in your compensation is for current and future services, not rewards for past performance. Don’t want to commit to that? Then don’t accept the promotion and raise.

Online News Business

No matter what their medium, most firms selling information electronically have a hard time generating profits. On the expense side, creating content is costly and labor-intensive. On the revenue side, access to “data on demand” (whether sophisticated mathematical analysis or trivial entertainment television), means more fragmentation of audiences over vastly greater “program” choices.

On the Internet, few receive revenue in excess of expenses. With broadcast media, increased capacity (e.g., more channels, alternative distribution methods) is starting to cause the same effect (reducing audience size and revenue per show).

What’s required for success in these businesses? Why do some companies like Bloomberg, charging $1,100-plus per month for electronically delivered information, keep growing when others attempting data sales on the Internet can’t keep customers even when charging only pennies, or, for TV via cable, find great subscriber price sensitivity? Simple: supply and demand. If you’re not providing something unique, you have no ability to impose charges.

Most TV programs are just copies of earlier successful shows. No uniqueness: too much supply. Then there’s the question of utility. Whether it’s television sitcoms or hecklers on-line, most entertainment programming is only marginally more desirable than other alternatives or no programming at all. (The definition of entertainment is just that-nice but not necessary.) If there’s no great value added, the public’s smart enough to find alternatives like reading a book, watching something else, or going to bed. No great need: low demand. Much supply, little demand equals low prices.

As happens time and time again in this world, distribution changes rapidly. Content evolves slowly with cultural advancement. Creative people become even more valuable as their reach increases over difficult venues. The more choice the reader/listener/viewer has, the more demand there’ll be for Bloomberg’s product-independent, quality journalism-and the more important it is to fight the credentials battles everywhere in the world whereaccess is denied to the people’s only true representative: the free, unfiltered, intelligent, investigatory press. The message that content rather than the medium is king massages just fine.

Solve a few technical distribution problems and the number of newspapers will skyrocket as well. But the circulation of each, just as with the audiences for specific radio or TV shows, will decline as consumers’ choices expand.

The Software Business

A rule of thumb in software is that 90 percent of the costs go into building the last 10 percent of the functionality. Successful design and implementation demand the political skills and courage to reconcile the 100 percent specification needed for approval with the slightly-less-deliverables that are possible. As I found out at Salomon and again with the Bloomberg terminal, you promise users everything; then you build what you can, and what you think they need. It’s the only successful strategy for a systems developer.

No wonder these Chief Information Officers (CIOs) have a very short life expectancy. In reality, their technical knowledge isn’t valuable in supplying the function they are hired to provide. Knowing the company’s products, competitive position, accounting, marketing, and personnel policies is what’s critical to success for any CIO; that knowledge, along with leadership, business acumen, and hands-on management, is what’s needed.

Size’s economics of scale are seldom realized. Take the great misconception in our business about software: that maintaining a program is cheaper than developing it. It isn’t. The fact is, software needs to be updated constantly to retain value. The inputs to it change. The hardware and communications change.

People always need new formats, sorts, fields, and calculations. That’s why we constantly hire more programmers. Or what about the belief that hardware is a one-time “capital expense”? People always say something costs N to buy (a cost they “capitalize”) and then assume that’s the whole cost. I always figure on 40 percent of N every year, forever (a cost you expense versus earnings)- 10 percent interest, 10 percent maintenance, 20 percent depreciation. That adds up to 40 percent in my book. Don’t quibble with details.

The End

Be sure to read Michael Bloomberg’s book on Amazon

How Habits Work: An Illustration

If you are a fan of the book, “The Power of Habit” by Charles Duhigg then you will like the following illustrations.

How Habits Work

Via Personalsuccesstoday – Originally found at PowerofHabit


Overview of the Book The Power of Habit – By Duhigg

Visualizing The Power of Habit By Duhigg by Lisa E. – Via GetThePicture.ca

How To Change A Habit – By Duhigg

How to Change A Habit – Via Angelikapiwowarczyk – Originally found on Power of Habit Website


How To Create A Habit – By Duhigg

Creating A Habit – via Angelikapiwowarczyk – Originally via Power of Habit


Habits, Willpower, & Decision Making – via FossConsulting

Via MakeAPowerfulPoint – Originally available on FossConsulting


Stages of Habit Formation – via FanxingKong

Stages of Habit Formation via FanXingKong

Lessons From The Founder Of The Discovery Channel

Last year I stumbled across the biography of John S. Hendricks the founder of Discovery Communications, it’s titled, “A Curious Discovery: An Entrepreneurs Story”. Initially, I thought the book would be another typical business biography (a la Jack Welch), but I was wrong. The book is about the remarkable life of a “media” entrepreneur and the role of learning, curiosity, & multidisciplinary thinking in achieving entrepreneurial excellence. This is one of those books that resonated so much with my personality and interests that it motivated me to restart this website. Below are some of my favorite bits from the book (I have categorized them by topic).

First, here’s Amazon’s summary of the book.

Hendricks is the founder and chairman of Discovery Communications, a global mass-media entertainment company consisting of 28 network brands including the flagship Discovery Channel, Animal Planet, TLC, and the Science Channel. Inspired by such classic television documentaries as Walter Cronkite’s The Twentieth Century and Carl Sagan’s Cosmos, Hendricks boldly set out to create an all-educational cable network to air documentary, nature, and science programming 24 hours a day. That was in 1982, when cable was still an unproven medium. How he went from a $100,000 second mortgage on his home and the brink of bankruptcy to a $23-billion media empire is one of the most engaging entrepreneurial stories you’re likely to read and also one of the most personal. From his anecdotes about growing up in 1960s segregated Alabama to his recounting of a courting by the enigmatic Ted Turner, Hendricks’ humility, sincerity, and prescience shine through. Along the way, you may even get a behind-the-scenes look at one of your favorite shows, such as Mythbusters, Shark Week, American Chopper, How It’s Made, and Planet Earth. –David Siegfried

What Drives Entrepreneurs 

I have taken a different approach in this book. I want to explore “why” businesses are created. Why do entrepreneurs do what they do? Why do they devote such enormous time, with a very high risk of failure, to create something new in the world? Why don’t they give up in the face of enormous obstacles? Why can they see things that others do not? Why are entrepreneurs so passionate about what they do? Why do they spend so much time daydreaming? And why are they so darn optimistic? It all begins, I’ve come to believe, with an overpowering sense of curiosity.

It struck me then that humans were somehow genetically wired to be most satisfied, most pleased, when they were working freely to create something new or better for themselves and their fellow humans.

Entrepreneurial Traits

When I pictured myself in the future, it was always working in a company or for a cause in a role where I was totally in charge of my own destiny. I simply could not envision going to work every day at a job where others planned my tasks. So, even then, my inner life was pointing me in the direction of entrepreneurship.

I have come to believe that successful entrepreneurs think differently from everyone else in some important way. Some of that difference may be baked in early as genetic or learned character traits. But even then, those traits will lie dormant unless they encounter the right opportunity. And almost always, that opportunity cannot be identified without some prior knowledge about new technologies or ideas or possibilities to which others haven’t been exposed..

It wasn’t that my work at the University of Maryland was boring; it was just that it suddenly seemed important to me to be in control of my own destiny. I needed to be on my own. I desperately wanted to be able to explore and develop ideas without any constraints. It sounds a little crazy now—and it seemed that way even then—but that’s the best way I can describe the emotions I felt…

I think most people I meet, at least from what they tell me, have such dreams. I also think that a sizable percentage of folks even turn their dreams into ideas. But only a small fraction of those “idea” people ultimately become entrepreneurs and execute on their ideas. Thus, if we are to develop more successful entrepreneurs in our society not only will we have to cultivate curiosity at the front end; we will also need to teach the skills needed on the back end to turn ideas into practical implementation.

For the first time since I had formulated my vision for cable educational programming, I began to sense—and worry—about an impending deadline to make it real. Like many other entrepreneurs in the same situation, I began to fret that there might be others out there not only with the same idea—but also further along in making that idea real. What if they beat me to market? What if their strategies were better than mine? Most of all, what if they lived out my dream and left me behind with a lifetime of regrets?most entrepreneurs will agree with me that they too went through a similar point of inflection sometime in their career. Before that moment, their dream, their idea, was more an idle fantasy that might be realized someday. After that point, it becomes an obsession; the clock is ticking, and every new day may be too late. And what sparks that moment is the sudden realization that you may not be alone in your quest, that there could be other competitors in the race.

Although vital to the creation of a new business, the obsessive nature of an entrepreneur can nevertheless impede the development of good management processes and practices that facilitate long-term business sustainability. I have watched numerous entrepreneurs build a business with admirable zeal and fervor only to lose it because they could not transition the venture to a stable enterprise that takes maximum advantage of all human talents within..

Entrepreneurs love every aspect of their creations but they simply cannot hang on too long to their micromanagement of operations. This is the fatal flaw of many entrepreneurs. The intense passion and single-minded obsession that was so necessary to overcome all the doubters standing in the way of a new business creation can prove deadly within a large organization searching to develop efficient operational systems that depend on disciplined analysis rather than wild-eyed optimism. The trick is to find a balance between the bold, optimistic risk taking of an entrepreneur and the intelligent management of resources by experienced business executives.

The ideal partner for an entrepreneur is an individual who deeply shares the passion and purpose of the entrepreneurial brand but also brings something more to the table: an intense drive to achieve growth through discipline and intelligent risk taking.

Again, it is a matter of balance—and, in my opinion, no entrepreneur can successfully embody both the “passion” and the “discipline” required to create an enduring company.

One of the key distinguishing traits of entrepreneurs is their willingness to pay close attention to their daydreams. Daydreams offer clues to what really interests us in life and persistent daydreams often unlock pathways toward the creation of something new in the world.

 New Venture Creation

There comes a time when every prospective entrepreneur must first share his or her big idea with another person. It is a perilous, even terrifying moment. What has been boiling in your brain for months, the obsession that has consumed your every waking moment and wrecked your sleep, suddenly demands to get out of your head, to be told to another human being—if only as a reality check to make sure that you aren’t crazy.

At that nexus, which can occur at the most unexpected times, often when you have other plans, everything comes together into an idea so stunning that it captures your imagination and won’t let go until you do something about it.

It is precisely that vast chasm between vision and reality, between the big picture and the secret, private dream that makes entrepreneurship one of the most exciting, and important, of all life endeavors—and in my mind puts great entrepreneurs on the same plane as those scientists, artists, and political leaders we celebrate on Discovery television

The process of becoming an entrepreneur, of taking the field in the great game of free enterprise, is mercurial. Because the path of each entrepreneur is different, there is no simple and universal road map.However, over the years I’ve observed that there are some shared experiences in the creation of any successful entrepreneurial enterprise. I passed through all of these stations while creating Discovery and I believe they are common to most entrepreneurs: 1. Curious observation 2. Preparation 3. Ignition of passion 4. Idea 5. Plan 6. People 7. Brand…

Having Conviction In Your Research & Ideas

But it’s my vision, I told myself. I’ve checked it and rechecked it. I’ve challenged every part of it and not found a single fatal flaw. I’ve read everything I can get my hands on about cable television, satellite communications, content sourcing, sponsorship prospects, and business plan development. I know I’m right—and if the Big Boys haven’t seen it, then it is their mistake, not mine.

Risk & Reward

Leaving the secure, but pay-limited, job at Budd’s for the wide-open world of Bill Fowler’s enterprise also taught me the absolute joy of embracing risk—of being in charge of my own paycheck. If I sold nothing, I made nothing. If I sold a lot, I made a lot. My fate was my own. And I loved that.

That moment when you jettison your career and go all in on a new venture has been called the scariest part of being an entrepreneur. It sure was for me.

Business Advice

That was my next lesson in entrepreneurship: offer your customers what they need, set a price based on perceived value, then work your butt off to match, then exceed, what you are offering. Too many start-ups die because they fail at one or more of these three variables: they either don’t understand their customers’ needs, they price too low to grow and thrive, or, worst of all, take the money from the customers and then don’t do whatever it takes to deliver on their promise.

There should be nothing amateur or homemade in a company that plans to play in the big leagues—and that included our “look,” the first thing about us that our clients and customers would see.

There is a tendency in start-up companies to identify the senior management slots you need to fill—and then to rush out and fill them as quickly as possible. It’s not a bad strategy, because it enables you to get under way fast and then fix any mistakes as you proceed. But I chose the opposite—and I think even better—strategy of filling those slots with the best people you can find, no matter how long it takes.

When you are building a company, you don’t think much about how many shares you own. After all, if the enterprise fails they won’t matter anyway. Instead those shares become a kind of barometer of control—how much control of the company you give away to investors and employees, and how much you retain for yourself.

My role in Discovery’s board crisis taught me that my shares, and my ability to retain them, would largely define my role in the company in the future. Had the board’s venture capital team forced a shareholder battle, the cable team directors and I might have lost—and I might well have been driven from my own company. I needed to be more vigilant in the future. Like so many entrepreneurs, I had made decisions and choices throughout the start-up period that ultimately affected my level of ownership in the company.

Most often this failure stems from companies mistakenly identifying their core business with a currently popular delivery or distribution technology. A business that defines itself as a “railroad” company will likely miss the opportunities of overnight air express delivery. By comparison, a company self-defined as being in the “transportation” business would more readily realize that all the alternative delivery technologies to railroads—air, highway, and shipping—are within their scope.

Content and technology aside, the heart of our business—frankly, of any consumer business—is the ability to discern fundamental trends in consumer behavior.

when a cable network drifts off brand, it may enjoy a short-term ratings bump—but then the numbers shrink again because the core audience has been driven away. Once you are not predictable anymore, not true to your brand promise, your core audience tunes out. This was true in the world of fifty channels, and it is even truer in the world of five hundred channels. It will be absolutely crucial to stick to brand promises as we embark on the next phase in television’s evolution.

Define your business mission in a way that separates it from what may be a fleeting means of distribution or delivery technology.

Don’t be intimidated by not being a current player in the business sector you are targeting.

Launching a business outside your career experience sounds like a bad idea, but there are also real advantages. For example, it can be advantageous to not be enmeshed in a static corporate culture that has obviously not seized on the opportunity that you have uncovered.

It sounds simple, but it is very hard to identify with any certainty major consumer behavior trends that are just now emerging but will define the future of your business.And the only way to obtain this knowledge is to get out there in the world and watch and listen. Read everything you can, from trade journals to pop culture magazines. When you have the money, commission surveys and focus groups. And never, ever become complacent, or convinced that you know what people are thinking.


To endure over the long term, I believe companies must continually address and be mindful of key survival questions.

1. Does the company’s brand stand for a purpose or cause and is that brand carefully protected and guarded?

2. Are the founding entrepreneur’s passion, obsession, and zeal complemented by the recruitment of experienced and skilled management team leaders who bring the discipline required to steward corporate assets over the long haul?

3. Does the company have ready access to capital and does it have publicly traded stock “currency” that can be used to acquire companies important to achieve economic scale and business leverage?

4. Are the interests of shareholders, employees, executives, and board members aligned and incented to produce long-term revenue and cash-flow growth?

5. Finally, and most important, is the company constantly poised to undertake intelligent risks?

Understanding The Business of Cable TV

From the beginning Discovery was a “basic” cable service—that is, it was included in the lowest-priced service package sold by cable operators to their customers. If you got basic cable service from these operators, you typically received the Discovery Channel along with CNN, ESPN, MTV, WTBS, and a host of other advertising-supported networks. Other cable networks, like HBO, were “premium” services and therefore carried no advertising to support their programming. These “premium” networks (sometimes called “pay” services) had to rely solely on subscription revenue generated by an extra purchase decision, beyond basic-level cable service, made deliberately by cable customers.

The advertising subsidy worked powerfully to minimize the subscription cost of basic service to cable customers in the same way that it had made broadcast television “free.” However, no television content is truly free. Advertisers recover the cost of the billions of dollars that they spend in advertising by setting higher retail prices paid by consumers for their products and services. Thus “free” television is a great illusion.

Basic cable television networks that have a specialized theme, such as Discovery, CNN, and ESPN, enjoy the same dual stream of revenue (from advertising and from subscription fees) that also supports, in the print world, such specialized magazines as Scientific American, Time, and Sports Illustrated. Magazines and newspapers, which all carry advertising, generally cost much less than publications, including books, that carry no advertising. An advertising supported newspaper, like the Washington Post, also consists of a bundle of different types of content—sports, opinions, local news, movie theater listings, etc.—that, because of advertising revenues, is priced very affordably for the consumer. Some readers may never read the sports section or the movie listings but they are still, of course, paying for this unread content. Now, imagine if these unhappy readers complained about the content they never read but still paid for, and the government then forced the Washington Post to break apart its editorial bundle and sell the individual sections separately, creating, for example, a separate Post sports newspaper, a Post opinion newspaper, and a Post entertainment newspaper. The interest in each of these new narrowly targeted newspapers would be less, readership for each would be diminished, and advertising would plummet since none of the new independent special-interest newspapers would attract the entire readership of the original Washington Post.

If you break apart that bundle, the economic model also breaks down—and consumers will find themselves having to pay more for a few “à la carte” channel choices than they previously paid for the entire basic 50–100 channel package. It is important to understand this characteristic of cable because, in 1985, we were setting out at Discovery to distribute television through cable systems—and we had two choices, “basic” and “premium.”

Now, by comparison, let’s look at the “premium” or “pay” model. The most successful premium service in history is HBO. Yet, after more than four decades of marketing, it has penetrated just 28 percent of cable and satellite homes. HBO in 2012 had 28 million subscribers. Thus, when a cable network is not provided as part of the basic package—even if it is HBO, with its compelling schedule of entertainment—that network can only attract about one in four cable customers as subscribers.

Recap: The 7 Traits of Successful Entrepreneurs 

1. An intense, driving curiosity I would like to say that all people have what it takes to be an entrepreneur, but it isn’t true. New business ventures can only be started by people who have a fundamental curiosity about the world and are powerfully driven by their curiosity to find solutions and solve puzzles.

2. A willingness to really “listen” to daydreams Persistent daydreams are often the key precursor to a burning passion to create something new in the world. When you find that your thoughts consistently drift toward an activity or idea or puzzle, this is a clue that there is something worth investigating and exploring in your life. Daydreams offer a path to discover what really engages our curiosity and passions in life.

3. A burning passion that leads to periods of creative obsession Passion is responsible for the stamina and perseverance needed to “stay on task” until the target is in sight. Yet often that target is in sight but frustratingly just out of reach for months or years.

4. An ability to visualize success There are many activities in a young person’s life through which a visualization of a successful effort or project becomes the groundwork for confidence and optimism. Planning a science project, a debate performance, or a well-researched term paper all involve “seeing” the activity before it is actually accomplished. If someone has never experienced the process of visualizing success in advance and seeing that visualization come true, I believe they are poorly prepared to create something new and risky in the world. There is a world full of doubters who stand ready to discourage and kill the dreams of those lacking a confident vision. You need to visualize past them.

5. Optimism and confidence that defy logic Like that young man at Harvard Business School, if you really think you cannot accomplish something, you won’t. If you really think you can accomplish something, you will. Pessimists never become great entrepreneurs. Optimism, even when it is against all odds, is the prerequisite for success. In business, “logical” is only what has been proven to work in the past. Prove your vision, and you will be the new “logical.”

6. Self-reliance and an eagerness to undertake the risks of creating one’s own destiny

7. Purpose An entire book could be written about this trait. In fact, a friend of mine, the advertising guru Roy Spence, wrote just such a book, titled It’s Not What You Sell, It’s What You Stand For. Like me, Roy believes that no one can build a valuable company without the fundamental ingredient of “purpose.” Of the seven traits I have listed, it is “purpose” that most singularly holds the secret to entrepreneurial success.

The End.

P.S. Pick up a copy of this book on Amazon  & follow Mr. Hendricks on twitter @JohnSHendricks.

Love Mental Models? Study Threshold Concepts!

*Note: I consider this to be one of the most important posts on this blog. In fact, I didn’t blog yesterday because I wanted to dedicate extra time to this post. If you are a student of mental models, this is the model that should guide your acquisition of all other mental models.


I started this blog 7 years ago with the goal of catapulting readers to become multidisciplinary thinkers and decision makers. I promised to do this by curating the web for mental models, sharing quality content, and investigating interesting trends. Since then, learning about mental models has become quite popular. A Massive Open Online Course has been dedicated to the topic of multidisciplinary thinking (with an enrollment of 100,000+ students). Books like the one written by my friend Peter Bevelin have developed cult followings and blogs like those of my friends Farnam Street, Bakadesuyo Value Investing World, and Maria Popova’s Brain Pickings have a massed thousands of followers. Even Paul Graham at Y combinator posted a link to Charlie Munger’s Famous Speech on Elementary Worldly Wisdom. One could say that the importance of understanding mental models and multidisciplinary thinking is now mainstream-ish (or at least in past “post early adopter” and at least in “early majority” territory).

I think that understanding how to learn about mental models remains (unexplored and unpopular). In other words, the journey that every aspiring renaissance thinker must undertake in order to become “worldly” isn’t as talked about or referenced. Here are some questions around this area:

How can we facilitate the discovery, learning, & comprehension of mental models?

What are the stages/phases in the learning of new mental models?

How does our perception/understanding change as we learn new concepts?

Recently, I came across a new area in pedagogy that changed my thinking about acquiring worldly wisdom. Specifically, I stumbled across a paper titled, “Threshold Concepts & Troubling Knowledge Linkages to Learning & Practice ” by Meyer and Land. This paper identifies the challenges and phases of learning new concepts (mental models). Furthermore, according to the authors, on our journey towards learning there are “threshold concepts” i.e. levels/gateways that we need to cross before mastering a subject.

Defining & Identifying Threshold Concepts

First let’s start with the definition of threshold concepts. Threshold concepts are:

“Conceived as gateways to learning, threshold concepts are specific ideas within disciplines “without which the learner cannot progress” (Meyer and Land 1). David Perkins explains that these concepts are not simply ideas that learners need to grasp, but concepts that must serve as lenses for analysis within the epistemological context of a discipline (42)” – via Composition Forum

“A threshold concept can be considered as akin to a portal, opening up a new and previously inaccessible way of thinking about something. It represents a transformed way of understanding, or interpreting, or viewing something without which the learner cannot progress.” – Meyer & Land 2006

So, on your knowledge acquisition journey how do you identify a threshold concept? Well they have the following traits – they tend to be:

Troublesome: Counter-intuitive, alien … or incoherent” because they challenge existing beliefs, past practices or inert knowledge, or can be conceptually difficult. Threshold concepts also challenge the learner to reflect on tacit knowledge of which she is “only peripherally aware or entirely unconscious”

Transformative: Once understood a threshold concept changes the way a student views a discipline (and the world).

Irreversible: Given their transformative potential, threshold concepts are irreversible, i.e. they are difficult to unlearn. Once you have learned a threshold concept it’s very difficult to go back.

Integrative: Threshold concepts once learned are likely to bring different aspects of the subject that did not appear, to the student to be related.

Bounded: Threshold concepts will probably delineate a particular conceptual space, serving a specific and limited purpose.

Discursive: Crossing a threshold concept will incorporate an enhanced and extended use of language.

Reconstitutive: Understanding a threshold concept may entail a shift in learner subjectivity, which is implied through the transformative and discursive aspects already noted. Such reconstitution is, perhaps, more likely to be recognised initially by others, and also to take place over time..

Liminal: Many have likened the crossing of the pedagogic threshold to a ‘rite of passage’ (drawing on the ethnographical studies of Gennep and Turner in which a transitional or liminal space has to be traversed; “in short, there is no simple passage in learning from ‘easy’ to ‘difficult’; mastery of a threshold concept often involves messy journeys back, forth and across conceptual terrain.

Threshold Concepts & Phases of Learning

Now let’s connect the idea of  ”threshold concepts” with the phases of learning. First, take a look at this image.

*Accessed via doceo @ http://www.doceo.co.uk/tools/threshold_4.htm

Using the language of “threshold concepts” each step change (in the image) can be thought as corresponding to what is called a “liminal passage”. And each plateau can be thought of as a “liminal state”. According to experts on “threshold concepts” there are 3 general step changes/ states – pre liminal, liminal – post liminal (we will address these soon).

Now read this:

… the movement through these liminal portals does not happen in a straight line but instead in iterative and recursive stages. In a preliminal stage, a learner’s tacit views are interrupted as she is introduced to and begins to grapple with a threshold concept. In a liminal stage, the learner begins to enact that knowledge; at the same time, she becomes aware of her work with the concept and her interactions with it. In a postliminal stage the learner becomes transformed, “beginning to think” like a member of the field or area in which the concept is situated, participating in the concepts within the disciplinary/epistemic communities where they are situated. Here, the learner demonstrates discursive knowledge of the concept, applying it to analyses and questions in ways that both reflect fuller metacognitive awareness of her own processes and awareness of the epistemic processes of the disciplines where the threshold concepts are used. - by Linda Adler-Kassner, John Majewski, and Damian Koshnick

As learners move through these liminal stages, their knowledge also becomes less tacit and more explicit, discursive, and conscious, at least for a time—they not only know what they know, but they are also more likely to recognize how they know it. This development of metacognitive awareness is an important step toward “high road transfer”, which “depends on deliberate, mindful abstraction of skill or knowledge from one context for application to another” - by Linda Adler-Kassner, John Majewski, and Damian Koshnick

Here is a visual representation of the journey between liminal states:

The Journey Between Liminal States

Accessed via – http://www.ee.ucl.ac.uk/~mflanaga/popupLiminality.html


Here is an example of the conceptual changes that occur between liminal states.

Definition and exemplification of three types of conceptual change

Type of conceptual change
Type of transformation and integration
Examples in economics
1. Basic
Newly met concepts some of which transform understanding of everyday experience through integration of personal experience with ideas from discipline.
Distinctions between price/cost; income/wealth (stocks/flows); nominal/real values; investment/saving. Real money balances, natural rate of unemployment.
2. Discipline threshold concepts
Understanding of other subject discipline ideas (including other threshold concepts) integrated and transformed through acquisition of theoretical perspective.
Marginality, opportunity cost, incentives (in particular the role and limitations of the price mechanism), cumulative causation (as for instance in the multiplier).
3. Modelling concepts
An understanding of the subject’s modelling procedures that enable the construction of discipline specific narratives and arguments (ways of practising).
Comparative statics (equilibrium, ceteris paribus), time (short-term, long-term, expectations), elasticity.

* Accessed via Economist Network -Adapted from Davies and Mangan (2007)

Crossing liminal states feels a lot like:

“The truth or insight may be a pleasant awakening or rob one of an illusion; the understanding itself is morally neutral. The quicksilver flash of insight may make one rich or poor in an instant. (Palmer, 2001 p.4)”

Putting it all together - Using Physics As An Example of Understanding Threshold Concepts

So lets recap everything we have learned by taking a look at the following excepts from an article titled, ” The Thermodynamics of Learning” by Marcus Wilson

“When we learn something ‘thresholdy’, things get more ordered in our brain. Pieces of information fit together better. We can see how concepts work, rather than just being pieces of knowledge. Things come into order. In thermodynamics, order is associated with a quantity called entropy. Specifically, something well ordered has low entropy; something with little order has high entropy. Ice has less entropy than water (since its molecules have an ordered structure), but water has less entropy than steam (since even in water there is some degree of ordering among the molecules). We give entropy the symbol ‘S’. (Actually, I’ve never stopped to think why it’s ‘S’ for entropy – Does anyone know?)”

“To learn a threshold concept, we need to have a move to more order. But a large, negative change in entropy means -TS is strongly positive and so if this is to happen we need to make the change in H (energy) strongly negative. In other words we need to ‘take the heat out’ of the system. If the system is ‘the student’, then this equates to getting the student to do lots of work. (Remember the first law of thermodynamics: Heat and work are equivalent). If a system does lots of work (on something else), it loses heat. A good example is gas from a pressurized bottle doing work as it moves to atmospheric pressure and expands – the nozzle of the bottle will get cold. The bigger the ordering that is required in one’s thoughts, the bigger the amount of work that the student needs to do. The process is assisted by a lowering of the temperature – a ‘cool’ environment (as opposed to a hot one with too much going on) helps the student learn.”

“Perhaps all this is taking a physics analogy a bit too far. If we think of the message as being “to get thoughts to order together is actually quite difficult” then it’s got merit – that is really what the Threshold Concept environment is about.”

Why You Should Care About Threshold Concepts

You should care about threshold concepts because they are the tipping points on your journey towards becoming knowledgeable (about a field). If you think of acquiring mental models as a process of crossing “thresholds concepts” then you are more likely to navigate towards deep understanding of ideas and thoughts (and likely to avoid the pitfalls of charlatanism).

Additional Reading

I highly recommend you start learning about “threshold concepts”. Trying to learn different disciplines without thinking about which “threshold concepts” are worth learning is like driving blindfolded – you can do it but your chances of getting to your destination are much lower. With that said here are some resources to get you started.

Introduction to threshold concepts:

1. http://www.ee.ucl.ac.uk/~mflanaga/thresholds.html

2. http://www.doceo.co.uk/tools/threshold_4.htm

3. http://www.doceo.co.uk/tools/threshold_3.htm

Applying Threshold Concepts to different disciplines:

1. To Business http://www.uow.edu.au/cedir/spotlight/innovation/UOW045443.html

2. To Managmenet http://www.sagepub.com/upm-data/55135_JME_Call_Threshold_Concepts.pdf

3. To Physics http://sciblogs.co.nz/physics-stop/2013/11/27/thermodynamics-of-learning/

4. To Teaching https://teachingcommons.stanford.edu/teaching-talk/and-after-students-get-it-threshold-concepts

5. To Writing & History http://compositionforum.com/issue/26/troublesome-knowledge-threshold.php

Catalog of Academic Papers on Threshold Concepts:

1. http://www.ee.ucl.ac.uk/~mflanaga/Thresholds_liminal_search.html

2. http://www.ee.ucl.ac.uk/~mflanaga/thresholds.html   *scroll about half way through the page

Events & Conferences on Threshold Concepts & Learning

1. University of Waikato Conference on Emergent Learning

Videos about Threshold Concepts & Learning

1. Ray Land: Threshold Concepts and Troublesome Knowledge

2. Ray Land: Threshold Concepts and Troublesome Knowledge – a Transformative Approach to Learning

3. Introducing Threshold Concepts Part 1 & Part 2