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Here's How Chicago Can Keep Its Top Tech Talent From Leaving for Other Cities
April 30, 2018 6:04 pm|Comments (0)

I’m sure you’ve heard by now that pretty much every metropolis in the country is claiming to be the next Silicon Valley. In a previous Inc piece I wrote, titled The Advantage Chicago Has Over Silicon Valley, I threw Chicago’s hat in the ring to be considered next in line.

Many Chicagoans have responded positively to the piece, validating Chicago’s entrepreneurial excitement. A handful of people, however, responded with some resistance to the constant comparisons to to Silicon Valley, like this Medium post by Jason Fried, CEO of Basecamp: Chicago, be Chicago

And for good reason–following another city’s playbook limits the space for originality. But on the other hand, resisting to target other cities is problematic and, to a some extent, dangerous.

Why? I’ll get to that in a second, but first I need to share a small part of my story:

I’m a twenty-something entrepreneur born and raised in Chicago. I founded MSTQ, a Chicago-based design and innovation firm, which has afforded me the opportunity to have a hand in some of Chicago’s most exciting tech startups. My work has given me a front row seat to Chicago’s growing tech scene, seeing first-hand this city’s immense potential for innovation. 

But there was once a time where I felt a deep sense of wanderlust. Not too long ago, I had dreams of packing a single suitcase and buying a one way ticket out. Admittedly, I felt like there was something bigger than what Chicago had to offer, that Chicago wasn’t forward-thinking enough and that I had outgrown it.

The problem is I’m most definitely not the only aspirational, bright-eyed entrepreneur that has felt this way. Many of my most talented friends–friends with incredibly promising creative potential that I admired–have left Chicago for cities like New York, Los Angeles and, you guessed it, Silicon Valley. 

Moreover, Chicago’s population has decreased for the third straight year. Meanwhile, urban populations are increasing everywhere else. While Chicago is still the third-most-populous metropolitan area in the US, it was the only one in the country’s top ten cities that saw a decrease rather than an increase in population, according to the Census Bureau.

So when influential figures in Chicago like Jason Fried resists comparisons to the very cities that are siphoning Chicago’s best native talent, they’re maintaining the status quo.

The crazy irony is that it was Fried himself who once preached the value of illuminating comparisons to competitors. In his book REWORK, here’s what he had to say about “picking fights”:

“If you think a competitor sucks, say so. When you do that, you’ll find that others who agree with you will rally to your side. Being the anti-_____ is a great way to differentiate yourself and attract followers. Taking a stand always stands out. People get stoked by conflict. They take sides. Passions are ignited. And that’s a good way to get people to take notice.”

So, why then, would you shy away from picking a fight with the biggest competitor?

The reality is, Silicon Valley is regarded as the tech and innovation capital of the world, bar none; it’s the modern day Rome of technology and innovation. And you know what they say–all roads lead to Rome, including the one from Chicago.

Insisting that young, ambitious Chicagoans like me ignore the success of the Valley hinders the ability to stand out and develop a sense of pride–a key ingredient in motivating the next generation of talent to stay in Chicago. 

Shouldn’t there be a target to aspire to? A vision to rally around?

Look, I get it. Let’s build something that’s our own. Let’s stop copying other cities. Let’s be original. Let’s not inflate our rent prices. Let’s make Chicago winters cool.

But instilling the belief that Chicago can be better than the best requires learning from and acknowledging the best. If today’s leaders in Chicago are going to preach a philosophy to its next generation of tech leaders, let it be Kobe Bryant’s perspective on comparisons to Michael Jordan:

“When you’re looking at players out there now, you’re saying, ‘OK, there’s not a next Michael Jordan.’ It’s not about the surface stuff. It’s about: Are they approaching the game the way he did?”

That way, the next generation of tech talent can not only better understand the formula for success, but also the Chicago’s unique strengths in comparison. And in Fried’s words, picking a fight with the best might inspire them to rally around the potential for the Second City to be first in innovation. 

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Southwest's Apology to Passengers on Flight 1380 Is Brilliant, and It's Not Just the Cash. Here's Why
April 21, 2018 6:05 pm|Comments (0)

For the passengers who survived the emergency landing on Southwest Flight 1380 this week, on which Jennifer Riordan died, the flight must have been a horrifying experience. 

The pilot and copilot have had been hailed as heroes, and Southwest CEO Gary Kelly was praise for the fast apology and condolence statement he offered via video. But you can imagine that the airline might want to continue to respond to the affected passengers quickly.

Apparently, it has. Even as the federal investigation into the incident continues, Southwest reportedly sent letters with personal apologies and quick compensation to passengers from Flight 1380 just a day after the emergency.

Obviously, any big company that faced a debacle like this needs to do something similar and quick.  Many do, but only in exchange for people offering to drop all claims against the company (more on whether that’s happening here, in a second).

But there’s something interesting in how Southwest handled the issue–a combination of what they offered, and how they worded the apology letter, as reported, signed by Kelly:

We value you as our customer and hope you will allow us another opportunity to restore your confidence in Southwest as the airline you can count on for your travel needs. … In this spirit, we are sending you a check in the amount of $ 5,000 to cover any of your immediate financial needs.

As a tangible gesture of our heartfelt sincerity, we are also sending you a $ 1,000 travel voucher…

Our primary focus and commitment is to assist you in every way possible.

What leaps out at me is, oddly, the smallest financial part of the compensation: the $ 1,000 travel voucher. (Although, it’s funny: psychologically people sometimes put a higher subjective value on a tangible thing valued at a certain amount, then they do on cash.)

Even in the wake of tragedy, Southwest is taking steps to try to keep these customers–as customers. 

As some commenters have pointed out, while the uncontained engine failure aboard flight 1380 was terrifying for passengers, and resulted in loss of life and injury, it’s by no means the first time a flight suffered a similar catastrophe and ultimately landed.

Commercial airlines like a 737 are designed to be able to fly with one of the engines disabled, and professional aircrew train and drill on what to do in this kind of situation. The emergency was deftly handled by Captain Tammie Jo Shults and first officer Darren Ellisor.

Part of why this story was so widely reported however, is that passengers were immediately sharing it on social media. One passenger famously paid $ 8 for inflight WiFi even while he thought the plane was going to crash, so that he could broadcast on Facebook Live what was happening and say a farewell to friends and family.

So, connect this to the travel vouchers. Beyond taking a step toward repairing the relationship with these passengers, what better PR result could Southwest hope for than some positive travel experiences and social media posts from one of them, as a result? 

I wouldn’t expect Southwest to articulate this rationale; that would actually undercut it. And, I do have a couple of other questions about how this all works, for which I’ve reached out to Southwest for answers. I’ll update this post when I hear back.

For example, I would assume that the family of the passenger who died on the flight, Jennifer Riordan, would be treated differently, and maybe also the seven passengers who reportedly were injured. 

There’s also the question of whether these are really just goodwill payments, or a way to quickly settle 100 or more potential claims against the airline. If it’s the more traditional, transactional legal strategy of just trying to settle claims quickly, then that undercuts a lot of this.

However, I’m judging based on the experience of one passenger, Eric Zilbert of Davis, California, that this might not be the case. Zilbert reportedly checked with a lawyer before accepting the compensation,” to make sure I didn’t preclude anything.” Based on the lawyer’s advice, went ahead and did so.

Of course, this doesn’t mean every passenger is happy with the gesture. For example, Marty Martinez of Dallas, the passenger who became famous after he livestreamed the emergency landing over Facebook Live, said he’s not satisfied.

“I didn’t feel any sort of sincerity in the email whatsoever, and the $ 6,000 total that they gave to each passenger I don’t think comes even remotely close to the price that many of us will have to pay for a lifetime.”

Even so, Southwest sort of got what they’d probably like to see in his case, anyway: a tangible demonstration that despite the experience aboard Flight 1380, he’s willing to fly with the airline again.

The proof? He gave his quote to an Associated Press reporter, the account said, “as he prepared to board a Southwest flight from New York.”

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Rihanna Shamed Snapchat Into an Apology. Here's Why Tech Companies Will Never Have Emotional Intelligence
March 16, 2018 6:00 am|Comments (0)

Absurdly Driven looks at the world of business with a skeptical eye and a firmly rooted tongue in cheek. 

Every time a tech company does something patently ignorant or offensive, it’s rarely worth asking the question: “What were they thinking?”

Almost always, the answer is: “They weren’t.”

And they certainly weren’t feeling.

An example is an ad released by Snapchat last week for its “Would You Rather!” game. It asked whether you’d rather “Slap Rihanna” or “Punch Chris Brown.”

Really. Truly. 

In 2009, Brown and Rihanna were involved in a much-publicized incident of domestic violence. Brown was charged with battery.

And this is something to “joke” about?

Please, take a look.

Oh, Snapchat finally took the ad down and offered some sort of apology.

“The advert was reviewed and approved in error, as it violates our advertising guidelines. We immediately removed the ad last weekend, once we became aware. We are sorry that this happened,” the company said.

You might have thought that it had somehow slipped out without anyone noticing. 

Yet this statement suggests that actual human beings examined it and decided it was appropriate for publication.

For her part, Rihanna has now offered a response — remarkably measured, in the circumstances.

She said: “I’d love to call it ignorance, but I know you ain’t that dumb! You spent money to animate something that would bring shame to DV victims and made a joke of it!!!”

This is surely the point. You can’t blame a rogue algorithm here. You can’t blame a malevolent piece of code.

Someone designed this execrable item. Someone animated it and then someone looked at it and approved it. 

And no one stopped to think: “This is so thoroughly vile and tasteless that we should all be ashamed of ourselves?”

Shouldn’t all those someone‘s face consequences?

“All the women, children and men that have been victims of DV in the past and especially the ones who haven’t made it out yet…you let us down!,” continued the singer. “Shame on you. Throw the whole app-oligy away.”

Snapchat tried again with, yes, an apology.

A company spokeswoman told me: “This advertisement is disgusting and never should have appeared on our service. We are so sorry we made the terrible mistake of allowing it through our review process. We are investigating how that happened so that we can make sure it never happens again.”

But it will happen again. And again.

Tech companies rely so much on machines that many of their employees think exactly like those machines.

To reinforce the fatal loop, the people who create the code and algorithms behind the machines tend to think like machines, too.

So when decisions are made, any actual human emotions are cast aside. Or never even engaged. 

Worse, too many have grown up — sort of — with the belief that you move fast, break things and apologize later. 

Well, your PR people pen your apology, while you’re too busy coding. 

Apologizing is easy.

Facebook CEO Mark Zuckerberg, for example, has made an art form out of it.

For example, after he and a colleague performed a VR promotion while staring blankly at the suffering homeless of Puerto Rico and high-fiving.

Will this complete blindness when it comes to understanding, appreciating and, frankly, even feeling human emotions ever change?

Unlikely.

Tech

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With 1 Tweet, Kylie Jenner Cut $1.3 Billion From Snapchat. Here's the Explanation Everyone's Missing
February 23, 2018 6:00 am|Comments (0)

With a single tweet yesterday, Kylie Jenner sucked $ 1.3 billion out of the market capitalization of Snap, Inc.  

Her whole message ran just 18 words, and that includes “sooo” and “ugh.” It all ads up to more than $ 72 million lost, for each word she wrote.

So, was it simply a tweet? Is Jenner just throwing in with the 1.2 million people who signed a petition objecting to Snapchat’s recent redesign?

Or is there something else going on?

I don’t have any inside information, but the timing of the tweet–the exact timing–makes me raise an eyebrow.

Here’s the background. Jenner is a social media influencer of the first order, making between $ 250,000 and $ 500,000 per post, according to one estimate.

That’s more money for a single post that almost everyone who reads this article makes in a year. Big-time influencer money. 

Pretty impressive performance for a woman who won’t even be able to drink legally in the United States until August 10 of this year. But Jenner is a Kardashian (half-sister of Kourtney, Kim and Khloé Kardashian).

Whatever else anyone may say, the Kardashians are brilliant marketers. I’m not exactly their demo, but I have to respect something about what they’ve managed to build.

And, whatever else they do, they don’t do things like this without thinking it through.

So, three things.

First, the change in Snap’s design potentially impacts the degree to which Jenner–heck, any of the Kardashians–can make money on the platform. Those 1.2 million Snapchat users who signed the petition? They’re her audience.

If there’s a change, of course she’d make noise. Double irony points for doing so on Twitter.

Second, the timing of the tweet: 4:50 p.m. Eastern time–less than an hour after the U.S. markets closed.

Recently, I wrote about how Mark Zuckerberg’s post in January about changing how Facebook’s news feed works sent his company’s stock into a tumble, and devaluing his own stake by $ 3 billion. Next time he posted, he did it outside trading hours.

So, by posting just outside trading hours, it’s almost as if Jenner knew she could impact Snap’s share price–but didn’t want to overwhelm it.

I don’t have any inside information. It’s just a hunch, but it feels like a a warning shot: Hey Snap, pay attention to what I can do if I want to!

But, it also feels like it’s not intended as a fatal blow. In fact, KJ did tweet again, reminding Snap that it was her “first love.” 

Awwww.

Sure enough, the stock price rebounded later Thursday, too. All’s well that ends well, right? 

At least until the next tweet.

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Here's Why You Shouldn't Pay $1.10 For A Dollar Of Investment Grade Bond Assets
February 18, 2018 6:12 pm|Comments (0)

I’ve received questions from prospective subscribers about the types of trade alerts that we issue to the members section of the Cambridge Income Laboratory. One type of trade is CEF arbitrage, or more specifically a pairs trade, where we simultaneously identify an overvalued CEF and an undervalued CEF in the same sector. The strategy then entails selling or selling short the overvalued fund while simultaneously buying the undervalued fund.

The advantage of a CEF pairs trade is that because both the sold and bought funds are from the same sector, we aren’t making a directional bet on the performance on the underlying assets. Instead, we’re simply relying on the powerful concept of reversion of CEF premium/discount values (see Reflections On Chemist’s CEF Report Pick Performance In 2017 for how this has worked well for us in the Chemist’s monthly CEF picks).

There are two main limitations of the CEF arbitrage strategy. The first is that the magnitude of the gains are unlikely to be very large, simply because it is by nature a hedged strategy. That’s the trade-off for the strategy being relatively low risk. The second limitation is that unless you already own the overvalued CEF identified in the pairs trade, you would have to locate shares of the overvalued CEF to sell short. With some of the smaller, less liquid CEFs, this can range from expensive to downright impossible. The most optimal set-up is therefore already owning the overvalued CEF, and then locking in profits by selling the fund and then replacing it with the undervalued CEF in the same sector.

With the introductory blurb out of the way, let’s see how this has played out for one of the more recent CEF pairs trade that we identified in the members section of the Cambridge Income Laboratory.

About 4.5 months ago (see Sell This Investment Grade Income CEF Now), we noticed the premium of Western Asset Income Fund (PAI), an investment grade bond CEF, suddenly spiking up to +10.16%. The 1-year z-score was +3.6, indicating that this fund was significantly more expensive than its recent history. My comments from the initial article are reproduced below:

I was looking through the CEF database today and noticed the Western Asset Income Fund (PAI) trading at an exceptionally high z-score of +3.6.

Its current premium of +10.16% is at a 5-year high.

(Source: CEFConnect)

A 1-year z-score of +3.6 tells us that the premium/discount is trading 3.6 standard deviations above its 1-year historical value. Statistically speaking, this would be a 0.02% probability of occurrence, assuming that the distribution of values is normally distributed (which it isn’t, but the point is that such a high z-score is a rare occurrence).

The 5-year chart above showed that the fund traded at quite substantial discounts over the past 5 years, sometimes exceeding even -10%. This makes the current premium of +10.16% even more unusual than the 1-year z-score of +3.6 would indicate.

At this juncture, I wanted to look at the entire history of the CEF since inception. Perhaps the past 5 years was just an anomaly, and that the CEF has commanded a consistent premium in the past? It turns out that was not so.

Going back to inception, only during a brief period in 2009 did the fund’s premium exceed 10%. An unusually high premium for an investment grade fund might be understood during the immediate recovery period after the financial crisis…but why now? I can’t think of a fundamental reason why someone would pay $ 1.10 for a dollar of investment grade debt.

(Source: CEFConnect)

I then check out the premium/discount values of the peer group. Maybe investment grade bond CEFs are for some reason on a tear thus accounting for PAI’s unusual premium? Nope, that’s not it.

The premium of PAI is 3rd-highest out of the 15 CEFs in the “investment grade” category of CEFConnect. But I don’t consider PIMCO Corporate & Income Strategy Fund (PCN) and PIMCO Corporate & Income Opportunity Fund (PTY) to be traditional investment grade income CEFs, so not counting those two funds PAI has the highest premium in the peer group.

(Source: Stanford Chemist, CEFConnect)

OK, so PAI is a pretty good sell or short candidate. What did I pair my short PAI position with?

What did I pair my short PAI position with? I chose the BlackRock Credit Allocation Income Trust (BTZ). I wanted to choose a fund with a negative z-score, but rather amazingly all 15 investment grade CEFs had z-scores 0 or greater. BTZ’s z-score of +0.8 wasn’t the lowest, but its discount of -9.04% was the widest in the peer group, as you can see from the chart above.

Next, I wanted to see compare the price and NAV returns of these two investment grade bond CEFs to check if there were signs of deteriorating portfolio values in the undervalued CEF, which might cause me to consider BTZ as the long partner in this pairs trade.

The opportunity for the pairs trade comes from the fact that PAI’s price return is significantly outpacing its NAV return, whereas that is not the case with BTZ. We can see from the chart below that PAI appears to be blowing BTZ out of the paper with a +19.29% YTD return compared to only +8.94% for BTZ.

Chart

However, their YTD NAV returns are nearly identical.

Chart

No warning signs there. That leads me to the conclusion that:

In summary, if you own PAI, now would be a great time to sell!

Let’s see how the thesis played out 4.5 months later. BTZ had a total return loss of -3.88% over this time frame. That’s bad, of course, but still relatively much better than PAI’s loss of -14.1% over the same period. In other words, BTZ outperformed PAI by 10.22 percentage points in only 4.5 months, or about 27% annualized.

Did PAI’s portfolio do much worse than BTZ’s? No, and in fact the reverse was true. PAI’s net asset value [NAV] fell by -2.10% over this time period, but BTZ’s was even worse at -3.24%.

If BTZ’s portfolio did worse than PAI’s, why was its total return (much) better? My regular readers will have already guessed at the answer: premium/discount mean reversion! Over the last 4.5 months, PAI’s premium of +10.16% has sank to a discount of -4.82%, while BTZ’s discount of -9.04% has widened slightly, to -11.9%. Therefore, the majority of the outperformance of the long BTZ/short PAI pairs trade was due to the contraction of PAI’s discount.

Chart
PAI Discount or Premium to NAV data by YCharts

Summary

This article hopefully conveys our thought process in recommending a pairs trade to our members. Anyone who owned PAI and swapped to BTZ to would have profited to the tune of ~10% in only 4.5 months (~27% annualized), which is equivalent to about 2.5 years worth of distributions from PAI!

Note that I did not need to do a deep dive analysis of either PAI or BTZ to initiate this pairs trade. This was based almost entirely on premium/discount mean reversion, or as my fellow SA author Arbitrage Trader likes to say, “simple statistics”.

Taking stock of the situation today, the long BTZ/short PAI trade has to be considered to be largely completed, as PAI is now trading with a discount of -4.82% and a 1-year z-score of -1.5, indicating that is now cheaper than its historical average. Although BTZ’s z-score of -2.5 is even lower, as is its discount (-11.9%), the gap in valuation is no longer there.

Are there any current opportunities? The following table shows the 12 CEFs in the database that currently have z-scores greater or equal to +2.5. If you own ones of these funds, if might be a good idea to seek out another fund in the same category that is trading with a more attractive valuation, particularly if the fund that you own is also trading at a premium. Don’t let mean reversion catch you out!

Name Ticker Yield Discount z-score
MS Income Securities (ICB) 2.71% -1.47% 3.9
BlackRock Science and Technolo (BST) 5.32% 3.05% 3.2
Tortoise MLP Fund (NTG) 8.61% 9.26% 3.2
ClearBridge Energy MLP (CEM) 8.85% 5.53% 3.1
Gabelli Utility Trust (GUT) 8.50% 44.95% 3.1
Templeton Emerging Mkts Income (TEI) 3.79% -8.17% 3.1
Sprott Focus Trust (FUND) 4.97% -8.86% 3.0
Nuveen S&P Dynamic Overwrite (SPXX) 5.58% 9.54% 2.9
RiverNorth Opportunities Fund (RIV) 12.09% 6.83% 2.7
Deutsche High Income Oppos (DHG) 5.42% -0.60% 2.6
First Trust New Opps MLP & En (FPL) 10.52% 6.67% 2.5

Western/Claymore Infl-Lnk Opps

(WIW) 3.79% -9.71% 2.5

(Source: CEFConnect, Stanford Chemist)

We’re currently offering a limited time only free trial for the Cambridge Income Laboratory. Prices are going up on March 1, 2018, so please join us and lock in a lower rate for life by clicking on the following link: Cambridge Income Laboratory.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I am long the portfolio securities.

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Here's What Happened When I Started Running My Life Like a Business
February 13, 2018 6:23 pm|Comments (0)

I wear the same thing every day. My banking is 100% automated. Once a year, I go to Costco and stock up on an entire year’s worth of essentials. My wife thinks I’m a little OCD (and you probably do too!) … but I firmly believe systematizing my life has made me more successful.

I run my life the same way I run my company: with streamlined systems and processes to guarantee success. You can’t go in blind and expect to land in the right place; you need to be planful, create a vision, and establish actionable ways to achieve your goals. It’s not for everyone, but I believe we all can benefit from implementing systems into our day-to-day lives.

There’s a System For That

Entrepreneurs spend so much time building out processes to keep their business running like a well-oiled machine. These systems are the nuts and bolts of everything the business does; without them, the whole thing would fall apart.

Few of us apply the same mentality to our personal lives. Most people are insanely busy all the time — myself included. I run four companies, I have three kids, and I value my personal time, too. The more tasks I can systematize, the more time I have to focus on everything that matters.

Take packing, for example. Most people make a new list every time they pack, but that’s just not efficient: not only are you wasting time on a repetitive task, you also run the risk of forgetting something. I travel a lot so I have a ready-made list that I use every time. This way, I don’t have to overthink it and the process is more efficient. Systematizing my life is about being purposeful with my time and never wasting a minute.

Systems Are Reliable — and Fixable

I’ve always believed in Michael Gerber’s sentiment, “People don’t fail, systems do.” Systems are meant to function cohesively and to set you up for success; if something goes wrong, it can almost always be traced back to a glitch somewhere.

I schedule my working days down to the minute — from the moment I wake up to when I go to sleep. This allows me to maximize my time so there’s never a second wasted, not even my commute: my assistant schedules all my phone calls for when I’m driving, so I can be just as productive enroute as I am in-office. (Don’t worry, I’m always hands free!). If I tried to squeeze calls into my office hours, I’d never get anything done.

It comes down to your mindset: when you start looking at each aspect of your life as a distinct system, it becomes easier to identify, address and streamline for the future.

A Systematized Life is a Simplified Life

Over the years I’ve learned that the less complicated the system, the more likely it is to work. That’s why our systems for our businesses are incredibly simple — as in, they fit on one page. Anyone who reads our operations manual can run a successful franchise. I apply this same philosophy to my life.

How’s this for a simple system: I wear the same jeans, T-shirt and Chucks almost every day. It’s my way of removing an unnecessary step from my life. The less time I waste on decisions like what to wear, the more time I have for more important things like my family and the business.

Maybe it’s because I’m a minimalist, but inefficiency is one of my biggest pet peeves. I swear it’s not just an oddball quirk; being efficient lets you spend less time working and more time living. After all, a simple life is a happier life.

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Here's a 30-Second Test to See If Your Content Has Any Chance of Taking Off
February 13, 2018 6:12 pm|Comments (0)

Here’s a sad story I see all the time. I see a hellbent content creator commit a ton of time, for the sake of being consistent, only to create so-so content that nobody cares about. How many company blogs do you know publish multiple times a week and receive a total of zero comments and zero shares on their articles? They spend time and money to write a story that nobody reads. It’s sad.

To fix this, I want to give you a framework to help you create outstanding content, the kind of stuff that truly gets noticed and talked about. 

Note: for the most part I’ll be referring to blog posts, but this principle applies to nearly any type of content.

Your audience wants one of two things from all of your content: to learn or to be entertained. That’s it. Delete everything else that doesn’t accomplish one of these outcomes.

It might sound simple to you, but if you use this as a filter before you publish anything, the quality of your content will skyrocket, the chances of it taking off will increase, and your audience will grow.

In the paragraphs below, I want to show you why this is true and how to implement it. The takeaway is this: The best content either teaches something new to a reader, or causes them to feel a strong emotion.

If you look at every piece of successful or viral content, you’ll find they do one of these things with masterful excellence.

Option One: Teach Something New

With over 942,000 followers on LinkedIn, Jeff Haden’s columns on Inc.com regularly appear in the top 10 articles of each month, with readership frequently surpassing a total of 500,000/month. He is a prolific blogger and knows what works and what doesn’t.

He said one of the biggest mistakes bloggers make is preaching to the choir. “I already know what I think, and so do you. Readers want to learn new things and take new perspectives. They want to think. Agreeing is nice, but agreeing never makes them think.”

So be careful: If you have trouble coming up with a clear answer to the question “what will my readers learn from this?”, then you should seriously consider reworking the piece. In other words, viral content provides incredible value for the reader. Make sure there are actionable takeaways, sharp insights, nuggets of wisdom, step-by-step processes, helpful resources, and / or efficient tools. 

Someone reading this might be thinking, but how do I know if my work is actually providing value? 

While I’ve written several top articles on Medium, been paid rates of a dollar per word, and been published at major publications like CNBC, Axios, Thought Catalog, The Next Web, and Business Insider, not everything I write goes viral. Not even close. As much as I improve, I’m still quite adept at writing terrible articles. Some of my worst articles appear on my personal blog daveschools.com. Here are two examples:

  1. What it feels like to finish a novel
  2. I cared more about people, then projects, and now it’s back to people. I think.

These will never go viral for a couple reasons. First, poor headlines. Second, if you start reading them, it will be a matter of seconds before your brain taps you on the shoulder and asks, “Why in the world are you reading this?” Because your brain is picking up on a clear fact: they don’t teach you anything. You won’t learn anything helpful from them. It’s just one person who doesn’t have you in mind blubbering on about their life. These will never, ever be shared on social networks. 

Let’s look at an example of an article that did go viral and why:

My most successful Medium article ever, I sat down with a millionaire who operates 10 businesses while sailing around the world with his family, which was the 7th most popular story on Medium in 2015, was syndicated by Business Insider, Quartz, MIT, and Fortune Magazine. It was successful because it gave five helpful, uncommon insights from an expert that taught small business owners new ways to manage their businesses better. 

This single sentence was highlighted 528 times: 

“To be successful in business does not mean changing the world. It means meeting a need (regardless of size) well and dependably over time.”

In five minutes, readers learned something new from this article. This should be the utmost goal of anything you write. Teach something new. Unless, of course, you are trying to entertain. This is the second option.

Option Two: Evoke Strong Feelings

Look at this non-educating and almost offensive article: F*** You Startup World.

It’s a bitter beatdown, wild rant, and brutal slamming against modern startup culture.

It teaches you nothing and yet it received 370,000 views in one day, one million views total (and counting), and more than 80,000 shares on Facebook. Why did it do so well? It didn’t really teach anyone anything and it contains 95 f-words! What happened?

This article illustrates the power of emotion. 

Readers resonate deeply with the author, relate strongly to his experience, and say, “This is exactly what I’ve been feeling and someone has finally put into the right words.”

Humans are emotional. They read to feel something strong. Your job as the writer is to make them laugh, let them sob, trigger them to righteous anger, or wash away their loneliness. You don’t have to teach them anything, you just have to deeply affect them. Inspire them. The right words have a way of unlocking pent-up emotions we never realized we had.

Your Turn: How to Apply This Filter to Your Content

Remember that there is no formula or single style of content that guarantees success. Your challenge is to find out how to teach or entertain in your own unique and original voice.

  • Study Gary Vaynerchuk, Tim Ferriss, and Mike Allen for examples of how masters create learning content.
  • To watch experts create entertaining content, analyze standup comedians and read Mr. Trump’s tweets (joking), but seriously, read novels, even some news articles, and first-person accounts of big events to see writers reach strong feelings. 

After you’ve written something, edit it with this test in mind. Does it do a good job teaching a concept? How can it be clearer? Does it do a profound job of moving the reader’s emotions? How can it be more passionate?

Edit, edit, edit until there’s no doubt in your mind that the piece accomplishes one of these two outcomes. Ultimately, if you apply this binary test to your thinking, it will help get you closer to creating wildly successful pieces of content.

Best of luck. Because, in all honesty, you’ll need a little bit of that, too.

Tech

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