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How do you distinguish the truly great talent from the rest?

The right people don’t need to be managed. The moment you feel the need to tightly manage someone, you’ve made a hiring mistake. The right people don’t think they have a job: They have responsibilities. The right people do what they say they will do, which means being really careful about what they say they will do. People who take credit in good times and blame external forces in bad times do not deserve to lead. End of story.

Almost across the board, people are worried. As a rock climber, the one thing you learn is that those who panic, die on the mountain. You don’t just sit on the mountain. You either go up or go down, but don’t just sit and wait to get clobbered. If you go down and survive, you can come back another day.

I don’t care how hard this period is. You have to have the combination of believing that you will prevail, that you will get out of this, but also not be the Pollyanna who ignores the brutal facts.

-Target a specific niche: solve a very specific problem
-Stay flexible: be willing to change
-Never under-estimate the competition
-There are no shortcuts: hard work

“Slyvester told me today that he had received a postcard from Bob, one of my students who had spent a few days at the Abbey. He was beaming with joy and gratitude. This makes me realize how small signs of friendliness can create much joy and small disturbances between people much sadness while the “great events” of the day often do not touch us deeply. An unexpected note from a friend or the passing remark from a neighbor can make or break my day emotionally, while inflation and recession, war and oppression do not touch my emotions directly. A distant catastrophe has less effect than a nearby mishap, and an interpersonal tiff raises more hackles than a worldwide calamity. The burning down of the monastery would be less “dangerous” than rivalry within its unharmed walls.

But how little do we use this knowledge? What is easier than writing a thank-you note, than sending a card “just to say hello,” or to give a call “just to see how things have been.” But how seldom do I do this. Still I realize that every time someone says, “I liked your talk” or “I appreciated your remark” or “Your note really helped” or “You really seem to feel at home here” – I feel my inner life being lifted up and the day seems brighter, the grass greener, and the snow whiter than before. Indeed, the great mystery is that small, often quite immaterial gesture can change my heart so much. The way to the heart always seems to be a quiet, gentle way.” Page 197-198

“I learned that it pays to hang around with people better than you are, because you will float upward a little bit. And if you hang around with people that behave worse than you, pretty soon you’ll start sliding down the pole. It just works that way.”

This is the text of the Commencement address by Steve Jobs, CEO of Apple Computer and of Pixar Animation Studios, delivered on June 12, 2005. One of the best ever given in my opinion.

I am honored to be with you today at your commencement from one of the finest universities in the world. I never graduated from college. Truth be told, this is the closest I’ve ever gotten to a college graduation. Today I want to tell you three stories from my life. That’s it. No big deal. Just three stories.

The first story is about connecting the dots.

I dropped out of Reed College after the first 6 months, but then stayed around as a drop-in for another 18 months or so before I really quit. So why did I drop out?

It started before I was born. My biological mother was a young, unwed college graduate student, and she decided to put me up for adoption. She felt very strongly that I should be adopted by college graduates, so everything was all set for me to be adopted at birth by a lawyer and his wife. Except that when I popped out they decided at the last minute that they really wanted a girl. So my parents, who were on a waiting list, got a call in the middle of the night asking: “We have an unexpected baby boy; do you want him?” They said: “Of course.” My biological mother later found out that my mother had never graduated from college and that my father had never graduated from high school. She refused to sign the final adoption papers. She only relented a few months later when my parents promised that I would someday go to college.

And 17 years later I did go to college. But I naively chose a college that was almost as expensive as Stanford, and all of my working-class parents’ savings were being spent on my college tuition. After six months, I couldn’t see the value in it. I had no idea what I wanted to do with my life and no idea how college was going to help me figure it out. And here I was spending all of the money my parents had saved their entire life. So I decided to drop out and trust that it would all work out OK. It was pretty scary at the time, but looking back it was one of the best decisions I ever made. The minute I dropped out I could stop taking the required classes that didn’t interest me, and begin dropping in on the ones that looked interesting.

It wasn’t all romantic. I didn’t have a dorm room, so I slept on the floor in friends’ rooms, I returned coke bottles for the 5¢ deposits to buy food with, and I would walk the 7 miles across town every Sunday night to get one good meal a week at the Hare Krishna temple. I loved it. And much of what I stumbled into by following my curiosity and intuition turned out to be priceless later on. Let me give you one example:

Reed College at that time offered perhaps the best calligraphy instruction in the country. Throughout the campus every poster, every label on every drawer, was beautifully hand calligraphed. Because I had dropped out and didn’t have to take the normal classes, I decided to take a calligraphy class to learn how to do this. I learned about serif and san serif typefaces, about varying the amount of space between different letter combinations, about what makes great typography great. It was beautiful, historical, artistically subtle in a way that science can’t capture, and I found it fascinating.

None of this had even a hope of any practical application in my life. But ten years later, when we were designing the first Macintosh computer, it all came back to me. And we designed it all into the Mac. It was the first computer with beautiful typography. If I had never dropped in on that single course in college, the Mac would have never had multiple typefaces or proportionally spaced fonts. And since Windows just copied the Mac, its likely that no personal computer would have them. If I had never dropped out, I would have never dropped in on this calligraphy class, and personal computers might not have the wonderful typography that they do. Of course it was impossible to connect the dots looking forward when I was in college. But it was very, very clear looking backwards ten years later.

Again, you can’t connect the dots looking forward; you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust in something ó your gut, destiny, life, karma, whatever. This approach has never let me down, and it has made all the difference in my life.

My second story is about love and loss.

I was lucky – I found what I loved to do early in life. Woz and I started Apple in my parents garage when I was 20. We worked hard, and in 10 years Apple had grown from just the two of us in a garage into a $2 billion company with over 4000 employees. We had just released our finest creation – the Macintosh – a year earlier, and I had just turned 30. And then I got fired. How can you get fired from a company you started? Well, as Apple grew we hired someone who I thought was very talented to run the company with me, and for the first year or so things went well. But then our visions of the future began to diverge and eventually we had a falling out. When we did, our Board of Directors sided with him. So at 30 I was out. And very publicly out. What had been the focus of my entire adult life was gone, and it was devastating.

I really didn’t know what to do for a few months. I felt that I had let the previous generation of entrepreneurs down – that I had dropped the baton as it was being passed to me. I met with David Packard and Bob Noyce and tried to apologize for screwing up so badly. I was a very public failure, and I even thought about running away from the valley. But something slowly began to dawn on me – I still loved what I did. The turn of events at Apple had not changed that one bit. I had been rejected, but I was still in love. And so I decided to start over.

I didn’t see it then, but it turned out that getting fired from Apple was the best thing that could have ever happened to me. The heaviness of being successful was replaced by the lightness of being a beginner again, less sure about everything. It freed me to enter one of the most creative periods of my life.

During the next five years, I started a company named NeXT, another company named Pixar, and fell in love with an amazing woman who would become my wife. Pixar went on to create the worlds first computer animated feature film, Toy Story, and is now the most successful animation studio in the world. In a remarkable turn of events, Apple bought NeXT, I returned to Apple, and the technology we developed at NeXT is at the heart of Apple’s current renaissance. And Laurene and I have a wonderful family together.

I’m pretty sure none of this would have happened if I hadn’t been fired from Apple. It was awful tasting medicine, but I guess the patient needed it. Sometimes life hits you in the head with a brick. Don’t lose faith. I’m convinced that the only thing that kept me going was that I loved what I did. You’ve got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven’t found it yet, keep looking. Don’t settle. As with all matters of the heart, you’ll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it. Don’t settle.

My third story is about death.

When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything – all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

About a year ago I was diagnosed with cancer. I had a scan at 7:30 in the morning, and it clearly showed a tumor on my pancreas. I didn’t even know what a pancreas was. The doctors told me this was almost certainly a type of cancer that is incurable, and that I should expect to live no longer than three to six months. My doctor advised me to go home and get my affairs in order, which is doctor’s code for prepare to die. It means to try to tell your kids everything you thought you’d have the next 10 years to tell them in just a few months. It means to make sure everything is buttoned up so that it will be as easy as possible for your family. It means to say your goodbyes.

I lived with that diagnosis all day. Later that evening I had a biopsy, where they stuck an endoscope down my throat, through my stomach and into my intestines, put a needle into my pancreas and got a few cells from the tumor. I was sedated, but my wife, who was there, told me that when they viewed the cells under a microscope the doctors started crying because it turned out to be a very rare form of pancreatic cancer that is curable with surgery. I had the surgery and I’m fine now.

This was the closest I’ve been to facing death, and I hope its the closest I get for a few more decades. Having lived through it, I can now say this to you with a bit more certainty than when death was a useful but purely intellectual concept:

No one wants to die. Even people who want to go to heaven don’t want to die to get there. And yet death is the destination we all share. No one has ever escaped it. And that is as it should be, because Death is very likely the single best invention of Life. It is Life’s change agent. It clears out the old to make way for the new. Right now the new is you, but someday not too long from now, you will gradually become the old and be cleared away. Sorry to be so dramatic, but it is quite true.

Your time is limited, so don’t waste it living someone else’s life. Don’t be trapped by dogma – which is living with the results of other people’s thinking. Don’t let the noise of others’ opinions drown out your own inner voice. And most important, have the courage to follow your heart and intuition. They somehow already know what you truly want to become. Everything else is secondary.

When I was young, there was an amazing publication called The Whole Earth Catalog, which was one of the bibles of my generation. It was created by a fellow named Stewart Brand not far from here in Menlo Park, and he brought it to life with his poetic touch. This was in the late 1960′s, before personal computers and desktop publishing, so it was all made with typewriters, scissors, and polaroid cameras. It was sort of like Google in paperback form, 35 years before Google came along: it was idealistic, and overflowing with neat tools and great notions.

Stewart and his team put out several issues of The Whole Earth Catalog, and then when it had run its course, they put out a final issue. It was the mid-1970s, and I was your age. On the back cover of their final issue was a photograph of an early morning country road, the kind you might find yourself hitchhiking on if you were so adventurous. Beneath it were the words: “Stay Hungry. Stay Foolish.” It was their farewell message as they signed off. Stay Hungry. Stay Foolish. And I have always wished that for myself. And now, as you graduate to begin anew, I wish that for you.

Stay Hungry. Stay Foolish.

Thank you all very much.

Warren Buffett supposedly loved this book called How to Win Friends and Influence People by Dale Carnegie (a former salesman). Here are some take-aways:

Rule number one: Don’t criticize, condemn, or complain.
Criticism puts people on the defensive and makes them strive to justify themselves. It wounds people’s precious pride, hurts their sense of importance, and arouses resentment.

“People don’t want criticism. They want honest and sincere appreciation.” Not flattery which is insincere and selfish. Appreciation is sincere and comes from the heart. The deepest urge in human nature is “the desire to be important.”

Everybody wants attention and admiration. Nobody wants to be criticized.
The sweetest sound in the English language is the sound of a person’s own name.
The only way to the best an argument is to avoid it.
If you are wrong, admit it quickly and emphatically.
Ask questions instead of giving direct orders.
Give the other person a fine reputation to live up to.
Call attention to people’s mistakes indirectly. Let the other person save face.

Charlie Munger’s USC Law School Commencement text on May 13th, 2007.

-Safest way to get what you want is to deserve what you want
-Wisdom acquisition is a moral duty
-Nothing has served me better in my long life than continuous learning
-What do you want to avoid to be a failure in life? Sloth and unreliability
-Avoid extremely intense ideology. I’m not entitled to have an opinion on a subject unless I can state the arguments against my position better than the people that support it
-Don’t overspend your income. Mozart became the most famous composer in the world, but was utterly miserable most of the time, and one of the reasons was he always overspent his income
-Envy, resentment, revenge, and self-pity are disastrous modes of thought
-Ben Franklin, “if you would persuade, appeal to interest not to reason”
-Perverse incentives and perverse associations are to be avoided. You particularly want to avoid working under somebody you really don’t admire and don’t want to be like
-If at all feasible, drift into something where you have an intense interest
-Have a lot of assiduity: “Persistent application or diligence; unflagging effort.”
-Life will deal heavy blows, but your duty is to utilize the terrible blow in a constructive fashion and not to submerge yourself in self-pity

Dyson is the guy behind the famous Dyson vacuum cleaner. His words of wisdom:

“An engineer’s life is 99% failure. So failure clearly doesn’t depress me. I think it has the reverse effect on me. You don’t learn from success, and your successes are few and far between. Failure is like a drug, actually. You go to work each day excited, because you know there are hundreds of problems there that you haven’t solved. It’s living on the edge, because you might come up with the solution or you might not.”

Abraham Lincoln failed in ways that would drive a normal person to suicide. But he kept pushing. He lost for state legislature at the age of 23, lost his girlfriend at 26, had a nervous breakdown at 27, and failed in business at 28. He was defeated for the speaker of the state legislature at 29 and for Congress at 34. He lost senatorial races at 45 and 49. Abraham Lincoln failed and failed and failed. And then – wham! – at 51, he was elected president of the United States! What would’ve happened to our country if he quit? – Source: Kathryn Wilson

“Before every day you go to sleep. Ask yourself one thing. Did you do every single thing you could today to make sure you did your best? It’s hard to answer yes, every single day. I don’t like to look at it in terms of me out-working the competition. I like to look at it as me conquering myself. Me being able to face my own fears and distractions and weaknesses and say that I over-came them.”