Hello there!
Welcome to the 34th edition of ‘The Lighthouse’!
It has been a week of utter chaos with second and third-order effects of the pandemic that are coming to the fore. With most of the countries going into phased lockdowns in the months ranging from April to June, core manufacturing services shut down. Now when the economy and markets are limping back on the road to recovery, the opening up of markets is happening in the opposite direction. Consumption is recovering but supply isn’t able to keep up the pace with it. Basic economics is kicking into place and prices are shooting up at an unprecedented rate. Pair this with shortages of containers in shipping lines and tapering down of ocean freight lines due to lower demand in the past few months - what you have is a perfect recipe for a showdown in commodity prices. Keeping my fingers crossed for the next 3-4 months. I haven’t seen these levels of price rise in 16 years of being in the manufacturing industry.
I’m talking about this because one of the links I’m sharing today is about a Japanese establishment that has endured for over a Millenium. Their core principles about servicing a customer, building large cash reserves, having no debt, etc., are key to their sustenance. Being a business owner and sitting in a similar place (btw we’re a thirty-year-old family business) this resonated with me very well. That was probably one of the things which kept us afloat during the pandemic - when you have enough cash reserves to take care of your fixed costs and no debt to service, you have the opportunity to say No when things are going South. You focus only on customers and business that you really are interested in doing and you continue to run the show. I’ll probably write something about this soon enough. I hope you enjoy reading the piece about the Japanese business establishment.
Let’s dig in.
Talking Is Not Doing
Cover Photo by Alejandro Escamilla on Unsplash
When faced with an arduous or overwhelming task, we talk about it incessantly. We talk about the challenges associated with it, the outcomes, the effort, etc. and avoid starting or doing the job. We trick our brains into thinking that talking about it carries the same weight as doing it.
But this is not true. Talking about something is well, just talking about it. Talking about it is not going to complete the task. Doing something about it will.
Talking and doing sap energy from the same reservoir of willpower. Hence, talking about it may not leave you with any fire-power to even start the task. The next time you face an overwhelming task, don't talk, do.
Here’s some interesting stuff I came across this past week:
Show Trust. Everyone Else Will Show You A Contract. by Zen Black: “….A contract or money upfront cannot change anyone’s innate values. What is inside a person (positive or negative) will invariably express itself, taking precedence over an external piece of paper forced onto them… A (legal) contract — especially one that is full of frivolous manipulative legal jargon — is an unhealthy & negative start to a relationship. With such a contract in place, trust need not exist.”
Lessons We Can Learn from A 1020-Year-Old Japanese Shop: “The Japanese companies that have endured the longest have often been defined by an aversion to risk — shaped in part by past crises — and an accumulation of large cash reserves…It is a common trait among Japanese enterprises and part of the reason that the country has so far avoided the high bankruptcy rates of the United States during the pandemic. Even when they “make some profits,” said Tomohiro Ota, an analyst at Goldman Sachs, “they do not increase their capital expenditure.”
How To Think For Yourself by Paul Graham: “One of the most effective techniques is one practised unintentionally by most nerds: simply to be less aware of what conventional beliefs are. It's hard to be a conformist if you don't know what you're supposed to conform to. Though again, it may be that such people already are independent-minded. A conventional-minded person would probably feel anxious not knowing what other people thought, and make more effort to find out.”
Here’s a thought I’m ruminating on:
“To philosophize is to learn how to die.” - Cicero.
Till next weekend, stay safe.
Cheers!
Prashanth
If you would like to discuss anything I’ve written about and shared, please reach out to me by replying to this email or sending a direct message on Twitter 🐦 @iam__prashanth. The tribe there is close to 1800 members and continues to grow.
Suppose you’re reading this because someone shared this newsletter with you or you clicked a link somewhere, welcome! Please subscribe to receive future updates. Thanks for your love and support!