An interview I did with Idea Mensch on Praxis, entrepreneurship, and an assortment of other things.

Where did the idea for Praxis come from? What does your typical day look like?

Praxis is really the culmination of a lot of ideas and experiences, beginning with my time in college when I felt like given the time and money, I wasn’t learning nearly as much as I wanted to and I was getting better experience working than in school. Through many ups and downs and steps in my career path over the past decade, I finally pulled the pieces together and created the kind of educational experience I wished I’d had. The idea of work with entrepreneurs, the best of liberal arts, business, and hard skills training, and a largely self-directed program packed into ten months for net-zero cost was the realization of a long held dream and the answer to my own and many other students’ frustrations.

A typical day for me begins with a swim, breakfast, shower, and then a half hour or so of reading a few blogs and catching up on social media. Then I dive into my to-do list, which involves a lot of phone calls, emails, and Skype meetings with entrepreneurs in the Praxis business partner network, interviews with applicants, catch-up calls with participants, programmatic stuff with our Education Director, marketing plans and tactics (which are highly variable) with our Marketing Director, reviews and updates to financials, and many other interactions with many other people. I plow through a lot of emails, as I have a zero inbox policy and respond to just about every serious email I get.

I like to get outside for at least half an hour each day to break things up, sometimes just to walk, sometimes while making phone calls. I also work in at least thirty minutes to write pretty much every day, and time to read whatever book I’m on. I find that if I don’t make time for writing and reading, my mind begins to feel empty, and my energy soon follows. I need to feed on new ideas constantly to stay charged.

How do you bring ideas to life?

Action. I am heavily action biased, which can certainly get me in to trouble, but I find that any idea I analyze for too long without moving forward in some way inevitably dies an ignoble death. I need to see progress, so I push things and move them, even if just a little bit every day. From the moment the idea for Praxis came together in my mind, I began hashing and rehashing it, contacting people I’d need to help build it, buying domain names, doing informal market research, and anything I could to keep moving the inertia. If I do at least one thing every single day to get an idea closer to life, it has a far higher likelihood of success than if I wait around for a time when I can make one big move. I see it like exercising. If the idea is a healthy body, you’re better off doing one thing every day, even if it’s just twenty push-ups, then waiting for the perfect day to spend two hours in an elaborate workout at the gym.

What’s one trend that really excites you?

The massive reduction in transaction costs due to technology. There are so many underutilized resources out there – both people and goods – because traditionally it’s been really hard to gather the right information at the right time to make the right connections. Smartphones, location services, massive amounts of digital data and other technology have made valuable information readily accessible and seamless. We’re just seeing the beginning of the efficiencies and opportunities this creates with things like Uber, AirBnB, and other ways people can find what they need in places previously unavailable to them because of prohibitive transaction and information costs. Everything from specialized skills and knowledge from experts, to the best brunch joint in town can be accessed instantly, where you once had to know a trivia king or read a phonebook.

What is one habit of yours that makes you more productive as an entrepreneur?

Delete, shred, destroy. I am a minimalist. I try to clear out any and everything that is nonessential. I condense and combine wherever I can. I go paperless with everything, and if important things are sent to me in physical form, I snap a picture and store it in the cloud so I can throw out the paper copy. I keep my desk, my inbox, and my life in general as clutter free as possible. I used to collect things I thought would someday be useful, but I found the mental space required to have so much stuff around (both physical things and facts and tasks in my head) was immense, and reduced my productivity. I now record crucial info and to-do’s and rely on my calendar and list to remind me so I don’t have to remember, and I purge all that is not needed, and even some things that are if they’re easily replicable!

What was the worst job you ever had and what did you learn from it?

Bagging groceries when I was 14-15. I hate to even call it the worst, because I actually enjoyed it and have enjoyed every job I’ve had, but compared to all the rest, it was definitely the least pleasant and rewarding. I learned several valuable things. First, that time moves really slowly when you’re not in “flow”. When we were humming and lines were long, hours passed like minutes as I frantically bagged and carried groceries out. It was actually a rush and I’d give myself challenges to see how fast I could bag the groceries without damaging them. When we were slow, the minutes crept by slower than anything I’ve ever experienced. This is why I actually loved working busy holidays.

Another powerful lesson was just how hard good help is to find. Nearly all of my colleagues stole items from the store. I even had a book stolen from the break room. Many were fun to talk to, but not at all trustworthy or hard working. Just by showing up on time for every shift, I quickly become one of the most valued employees even though the youngest. It was a sad dose of reality, but helped me temper my expectations for a working world in which most people simply aren’t that good as employees.

Finally, I learned that those who hated their jobs did worse and were less happy than those who didn’t, and that it was largely a choice. Some of my coworkers and managers were always unhappy clock-watchers. They didn’t perform well and didn’t value their own work. Some took pride in it. It wasn’t a difference in ability or position, but a difference in outlook. Some had fun with work and treated it like a playful experience and one they could always improve in. They excelled and were generally happy. Others saw it as a necessary burden and did the bare minimum. They had little pride in themselves and were generally unhappy. It became clear that belief trumped external circumstance when it came to fulfillment.

If you were to start again, what would you do differently?

Take bigger risks sooner. It took me too long to realize that what everyone else says, does, and believes is not as important as my gut. I may fail more going that route, but failure is the best way forward, and it took me too long to not be afraid of it. I would try to get some of my earlier, crazier ideas of the ground instead of waiting for validation.

As an entrepreneur, what is the one thing you do over and over and recommend everyone else do?

Constantly force yourself to put into words – written and spoken – your vision and value proposition as concisely as possible. Whether for your company or product, or just for your life in general. What are you trying to build? Why does it matter? What will be the outcome? It’s incredibly hard to understand and articulate, even for those in the middle of successful ventures! But it’s crucial self-knowledge and it brings about crucial self-honesty.

What is one strategy that has helped you grow your business? Please explain how.

Our business is brand new, so the only growth we’ve experienced this far is going from zero to one and getting our first class off the ground. The biggest aid to that was probably cashing in tons of accumulated social capital. I’d spent ten years doing favors for people, making connections, sharing information, ideas, and feedback generously, mentoring, and generally trying to be kind, helpful, responsive, and someone who gets things done. This built up a lot of goodwill with a wide network. When Praxis get going we needed as much as we could get, because there are some things you can’t do with money, time, or individual effort alone. We needed expertise, media exposure, connections, and much more, and it was only by cashing in on that accumulated social capital that we were able to grow from seed to sapling.

What is one failure you had as an entrepreneur, and how did you overcome it?

My original business plan for Praxis was essentially a work for free arrangement that I felt was really groundbreaking and beneficial to all parties. I was quite far along in the process when it dawned on me to check into current labor laws and regulations, only to discover that what I had in mind was basically illegal. You can’t work for free unless you actually destroy value at a company, according to current regulations. My initial reaction was resigned indignation. I was ready to give up on the whole idea altogether until my brother, a seasoned and successful entrepreneur and a close friend and mentor, just laughed when I shared it with him. He said, “That’s great! That’s what’s kept everyone else with this idea from moving forward, so it means less competition for you!” He assured me there’s always another way to get at the same end goal, and with some creative thought and effort, we found one.

I will never forget that phone conversation, or the non-threatened, playful approach my brother brought to the situation. He had been through things like this and had internalized the lesson that there are no obstacles that a good idea can’t overcome somehow. That was huge for me.

What is one business idea that you’re willing to give away to our readers?

Rental everything. I don’t want to have to own and maintain a weed Wacker, lawnmower, suits for formal occasions, golf clubs I seldom use, a boat, camping gear, etc. But I do want to have access to these things, either regularly or infrequently, and in quality and quantity it wouldn’t make sense for me to buy and maintain myself. A combination of businesses and individual owners on a one-stop peer-to-peer platform where prices, location, ratings and availability were open and accessible could make my life a lot easier and make use of a lot of underutilized assets sitting in garages, warehouses, or stores. Sure, it’s a logistical challenge, but you figure that out and you’ve got at least one customer for life!

Tell us something about you that very few people know?

I can clap with one hand. On both hands.

What software and web services do you use?

Google. Praxis uses Google apps for business, and the combination of my iPhone hardware with Gmail and Drive apps is unbeatable.

It’s simple, clean, has tons of storage space, and intuitive search function, and it’s the industry standard. I have no particular brand loyalty, so as soon as I use something I like a lot better, I’m happy to switch. Right now, nothing comes close.

What is the one book that you recommend our community should read and why?

The Act of Creation, by Arthur Koestler. This lesser known gem is quite an amazing book, jam packed with insight about what human creativity looks like and how it happens. It’s a powerful reminder of the value of daydreaming and subconscious activity. It’s empowering and humbling at the same time, like all great truths.

What people have influenced your thinking and might be of interest to others?

In terms of contemporaries, I like to read Fred Wilson’s blog AVC.com, I enjoy Seth Godin’s blog as well, and I love consuming nerdy economics stuff from EconlogEcontalk, and The Freeman. If we’re talking all time, I’ve always appreciated deep insights on the human condition from Mark Twain, Albert Jay Nock, C.S. Lewis, Frederic Bastiat, Benjamin Franklin, Adam Smith, and Socrates.

AP-IM article PRAXIS-HEADER-CONCEPT-1

From Allister & Paine

Tell me about your background in education and how it inspired you to launch Praxis.

Isaac Morehouse: More than a decade ago, I was a frustrated college student.  All the best things I was learning came from working, and from my own study, not from my expensive accredited classes.  I discovered that getting good grades and gaining valuable knowledge were totally separate in the college experience.  I disliked the antagonism between students and their universities.  If it wasn’t tuition, fees, parking permit and textbook costs going up, it was poor quality instructors or new PC rules and bureaucracy.  You don’t see this in most industries; this thing where the producer of the good is not at all accountable to the consumer.  As long as the subsidized student loans and aid keep flowing in, the university does whatever silly thing it wants.  It all struck me as kind of a big joke.  I got paid on the job to learn amazing things that shaped me and stuck with me, meanwhile I was paying to sit in fluorescently lit cinder block cells where many of the people complained, half-assed the work, and didn’t want to be there – I’m not talking only about students.

I dreamed of one day starting my own college where work and class weren’t so starkly divided, where the relationship (and hence accountability) between the producer and the consumer was direct and immediate, where learners took ownership of their experience and didn’t pay for things they didn’t want or found no value in.

I spent the intervening decade working in and around college, nonprofits, and various educational andcareer preparation programs.  Most of these programs were free, and many of the students would say things like, “This is what I wish college was like!”

With the emergence of MOOC’s and the declining value of the college degree (it’s the new high school diploma), I decided it was time to revisit my old dream of a different kind of educational institution.  I put the pieces together – experience with dynamic businesses, a powerful collection of online resources and in-person discussions, mentoring, and self-guided projects, certified with oral exams (no multiple choice or memorization) – and crammed it in to the most compact and cost effective package possible.  A ten month-program with a net cost of zero (tuition being equal to earnings).

Explain the concept to me; what does it mean to ‘break the mold’?

Isaac Morehouse: Degrees are a dime a dozen.  No one cares any more.  What can you do?  What have you created?  Those are the questions that matter, and simply saying you bought yourself a degree from a university no longer signals those things.  There are plenty of reasons people go to college – as a consumption good (a four year party), to get knowledge, meet people, gain skills, find out what they like – but every one of these can be had better and cheaper elsewhere.  The real reason people keep paying to go is to get that coveted credential.  The degree is supposed to be a ticket to a good-paying job.

There are two problems with this.  First, the market is inflated.  Everyone has one and it doesn’t really guarantee you much more than a least common denominator kind of signal.  The second problem is, frankly, making a job the goal is kind of boring and not that secure any more.  You are not your job.  You are your own brand, whether you want to be or not.

You’ve got to think like an entrepreneur, whether you ever start your own business or not. I think humans are born entrepreneurs and the education system beats it out of most of them.  You’re rewarded for conformity, following rules, not questioning the purpose, not innovating around problems, not suffering big failures or benefiting from huge successes.  It’s a rigidly controlled environment that looks nothing like the market.

To break the mold is to take your education into your own hands.  Do what works for you, not the easy, well-worn path.

Why do you think alternative education programs like App Academy & Dev Bootcamp have such higher job-placement rankings than traditional 4-year universities?

Isaac Morehouse: Employers don’t know what they’re getting anymore if they hire based on a degree.  They look for experience and evidence of actual value created.  If you’ve got the courage to do something different from the herd, and you’ve done something specifically that demonstrates your abilities – like built a website or programmed some software – that’s tangible and valuable to employers, co-workers, investors, customers.

The VC firm Andreessen Horwitz says that, not only do they not frown upon entrepreneurs who have skipped out on the college conveyor belt, they actually see a positive correlation with dropouts and all the attributes they look for in a founder.  Soon, lots of people will be crafting education experiences for themselves outside university walls, but today there are first mover advantages to breaking the mold.

Talk to me about how you are single handedly redefining the concept of a ‘college dropout.’ What does that phrase mean at Praxis?

Isaac Morehouse: Who is in the driver’s seat when it comes to your goals, skills, ideas, interests, and experiences?  You can either move forward under your own direction, or get pulled wherever the current takes you.  Those who are conscious of this fact and are explicitly setting out to do the things of most value to themselves rarely find college to be the only or best choice.  If you go to college, I can’t really tell whether you’re actively in control of your journey.  Everyone does that.  It’s actually harder to not go that route today.  Doing something different sends a strong signal that you have taken ownership of your life.  That’s exciting.

I meet so many young people who look a little ashamed when they tell me they quit school to build apps, or start a marketing business, or learn to code.  They have paid a huge social cost to pursue something more valuable, and they’re still a little insecure about the fact that they don’t have an easy answer at networking events for, “Tell me about yourself.”  Guess what: I don’t really want to hear your major or educational status.  That tells me nothing about you.  I want to hear what you’re pursuing, what you value, what you can do for yourself and the world.  It’s hard to hone that in a classroom.

College is kind of a personal development moral hazard problem; young people defer the hard work of self-discovery and ownership of their professional lives because they think a credential will do the heavy lifting for them.  It won’t.  The sooner you learn that the better.

It’s not about being a college dropout, which implies you fell flat somehow, it’s about being an opt-out.  You opted out of a system that wasn’t built around you, and you crafted your own educational experience out of the best of what’s available to you.

How grueling is the Praxis application process?

Isaac Morehouse: About 10% of applicants get accepted.  We’re looking for work ethic and drive above all.  I call it the “sleep in your car” test.  You’re either willing to sleep in your car to achieve what you want or you’re not.  We don’t actually make you sleep in a car, but that’s the quality we’re looking for above all.  We have a short application on the web, and then a few phases of supplemental material we request if you make it past stage one.  There are two interviews, and if you make it that far, some interviews as we work to match you with a great business partner.  A lot of smart applicants don’t realize it’s not just about shipping off your application once and being done with it.  It’s a process, and we want to see the same promptness and professionalism throughout the entire thing.

Who are a few of your entrepreneurial heroes and why?

Isaac Morehouse: I’m going to get old-school here.  James J. Hill is one of my favorites. Hill refused any government subsidies, eminent domain land seizures, or special favors that all the other railways were lobbying for and getting. He built a better railway and outcompeted them purely on the market, while they all squabbled over tax dollars and made cozy with regulators and squandered money.  It’s a classic case of what happens when you’re focusing not on your customer and their needs, but on big political interests and their needs (not unlike what we see in higher ed.). Hill was accountable to customers and investors, the others were accountable to Washington power brokers.  He created value, they created corruption, graft, and waste.  I’m a fan of Cornelius Vanderbilt for much the same reason.

There are a lot of others I really respect and have learned from, but the danger of mentioning those still living and active is that they’ll go on to do something really stupid or offensive, then I’ll be asked to defend them! In general, I love entrepreneurs who work around stagnant status quo solutions the way Uber works around taxi cartels, or Bitcoin works around a screwed up banking and financial racket.

What value does Praxis provide to businesses that they can’t get anywhere else?

Isaac Morehouse: Businesses are hungry for good talent.  It’s hard to find.  Specialized skills can be taught, but raw drive, reliability, values, determination, and teach-ability are rare and hard to identify.  Praxis does that for you.

We send businesses top-notch young people who are ready to come in and help in any way they can.  These are individuals who don’t want to merely perform tasks, they want to understand the vision of the company and help you build it.  Many baby-boomers are getting close to retirement or slowing down and they want someone to grow into a leadership position.  They may not have a child who’s able or willing, but they want someone to pass their company and their vision off to.  Those are the kind of people we’re sending to our business partners.

Unlike interns, who are typically there for only a few months, and for whom it takes a lot of time and effort to find and manage, Praxis participants spend ten months in a business, we vet them and mentor them along the way, and many end up with job offers from their business partners after the program.  It’s a great, low cost way to get young talent in the door who can both create immediate value and get a ten-month test-drive for future compatibility.

A little more than a year ago, I interviewed my son Nolan for this blog.  We had a lot of fun, and I thought I’d interview him again now that he’s a year older.

We followed the same questions from last year’s interview, but decided to change the format to audio.  Last year I recorded it but had to transcribe the whole thing.  This time, I decided to let the raw audio do the work.  Enjoy!

In the last century a minority of great economists, led by Ludwig von Mises, clearly and forcefully pointed out the impossibility of calculation and planning under a socialist economy.  History bore them out, and the Soviet Union collapsed under the crushing weight of its own absurdly uncoordinated production patterns.  Absent a price system, planners grasped for anything they could measure in order to get the right mix of goods.  They judged the success of the nail factory by the total weight of all the nails it produced, which naturally led to factories producing giant nails of no use to anyone.  Then they switched to the number of nails produced, which led to tiny nails, equally useless.  It may seem like a silly case of some rascally producers, but regardless of the intentions or skills of the workers or planners, how were they to know what type, size, quantity and quality of nail to make?  They had no connection or effective communication channel to the consumer.

The insights about the impossibility of planning under total socialism apply equally to so-called “mixed” economies, except that whatever remnants of a market are in operation will stave off total collapse at least for a time, acting as a kind of safety valve.  In other words, the same top-down disorder that resulted in a surplus of mustard and a shortage of bread can be expected in the “planned” segments of any economy.

Education is “mixed” in the US, but more top-down than market based in almost every case.  There is almost no relationship between the end users of education – students and their parents – and the producers and planners in the system.  It is no wonder the education system focuses on compliance, obedience, respect for authority, behaving exactly like other people your age, memorizing things whether or not they’re valuable, and a lot of other characteristics inimical to a free society and entrepreneurship, production, and innovation.  They focus on these things because they can be measured absent a market.  Something like student satisfaction is far more important, but only the nuanced, complex, adaptive market order can cater to such individualized, subjective vagaries.  Top-down orders don’t know what to do with it so they endlessly tweak and argue over Common Core and other arbitrary outputs that can be measured.

Are teachers paid too much?  Too little?  Are facilities too big and costly?  Too small and dated?  Are class sizes too big or too small?  Do students need more tech, or less?  Longer school days and years, or shorter?  More extra-curriculars or fewer?  More or less homework?  More STEM or more arts?  No one knows, and no one ever can know absent a market.

Imagine markets for other goods and services if they were managed in this way.  Does your local grocery store need more of fewer types of refried beans?  Do you think a town hall meeting and a few bean board elections would come to a better solution than the market process?  Does “society” need more trucks and fewer sedans?  The absurdity of these questions ought to give pause before we enter ridiculous debates about whether schools or universities need more of this, or less of that.  Good intentions and good people can’t make sense out of the chaos.  Only markets can.

The more managed a system, the more it relies on what can be easily measured, and will therefore tend to produce those things rather than what is of value to consumers.  If this goes on long enough, consumers may forget that they even have an opinion, or that they could even value things other than the low-quality product they’re given.  If you’d never lived in a world with a flourishing, diverse market, you may not even know that you wanted low-sodium extra smooth refried beans, because you didn’t even know canned beans existed.

The solution in socialist countries was private property.  Even at its peak, those who went outside the system and operated in black markets kept some semblance of quality of life possible.  Once people were formally allowed to take ownership over their own lives and resources, markets and a functioning price system emerged and quickly began the ongoing coordination and creative destruction of a beautiful spontaneous order.  Consumers were once again king, and their wants and needs (sometimes unknown until entrepreneurs offered it to them) were the ultimate driving force.  Production patterns became flexible yet highly efficient at moving resources from lower value to higher value uses, as determined by the preferences of the end user, not some board or commission.

Unless private property (the ownership of ones own learning) in education reigns, educators will continue to grasp in the dark for what to produce.  They’ll tend toward uniformity, authoritarianism, and clumsy, blunt approaches that lend themselves to easy measurement.  Once consumers seize ownership of their own learning and seek products and services outside the grip of the state, the education market will reach full bloom and a cornucopia of methods and means will emerge.  Until then, the question, “What should education look like?” is as unanswerable as, “What should an economy produce?”.

As soon as you say, “Everyone should believe X, and if you don’t, you’re a crazy”, you make X look both less desirable, and more likely to be mistaken.

If X really is obvious, you needn’t pressure everyone to accept it. Anyone who denies the irrefutable is not going to be pressured anyway. An appeal to authority or consensus is not going to win over doubters, nor should it. If X is untrue or even a little bit off in some way, your anger at non-believers will harden your perceptions and form an intellectual arrogance that blinds you to new developments. It also makes you look like an ass who’s afraid of a world where people believe things differently than you.

Believers in far-fetched, fringe ideas rarely suffer from this kind of angry, shaming proclamation, because they’re used to their ideas being considered fringe. Those who believe generally accepted ideas, or who oppose fringe theories, are most in danger of this mindset. They may be entirely correct that the fringe ideas are silly, but the angry demand that everyone agree with generally accepted ideas is at least as anti-intellectual as the fringe ideas themselves, and revealing of a deep insecurity.

From the Praxis Blog

Ultimately, what people believe determines the kind of world they live in. When the bulk of society is willing to tolerate some kind of annoyance, or oppression, or shortcoming, or injustice, or unfairness, it is likely to emerge in that society. Everyone weighs the costs and benefits of resisting undesirable features of social and political institutions, and when the costs are too high, they find ways to cope rather than push back.

Sometimes the coping includes creating belief systems that label the undesirable features good, or at least inevitable or necessary. These status quo justifying belief systems keep the status quo safe from pressure to improve. You see this in business, politics, and all manner of social settings.

If the beliefs of members of society are the binding constraint on the social order, how do those beliefs change, as they sometimes do, and often quickly and radically? (Think about the complete reversal of the common beliefs about slavery in the early 19th century, and the worldwide institutional changes that rippled outward from it).

There are two primary ways to change beliefs. You can give people new ideas and new experiences. Creating new ideas is to directly confront those that form someone’s belief system, and ask them to make room for new ones. It is to conceptually challenge, confront, question, or inspire. Think of the people who challenge the status quo with books, songs, sermons, speeches, essays, and conversation. Think of the times your mind has been opened or changed by a teacher or author or friend.

It’s easy to assume this direct educational approach is the only way to change beliefs, but there is another way more subtle and just as powerful. It may be less glamorous because it often lacks the decisive light-bulb moment or a clear hero, but it’s effect is no less profound. It is to give people new experiences.

This approach to changing the world does not require an intellectual turnabout, or any arguing over theories. When you create new experiences and offer them to the world, they are either valuable or not. If they make lives better, they succeed and overtake or fundamentally alter people’s beliefs about the status quo, sometimes before anyone consciously notices. Those who create new experiences are entrepreneurs, and they are world changers just as the influential intellectuals.

While people endlessly debate the merits of immigration law, and whether individuals from other countries should be allowed to work in the US and on what terms, entrepreneurs keep improving technology and creating jobs for foreign workers where they can create value for US firms and consumers without having to hazard immigration red tape. Innovators find ways to integrate the world economy even when political institutions and public belief make little room for it. Experts long debated the correct way to determine long distance telephone rates, who should own the valuable telephone lines, and how they should be managed. While they were wrangling, cell phones were created, and now the debate seems meaningless. While defenders of the status quo say taxi service must be regulated and restricted to work, Uber comes along and awakens us to the reality that it doesn’t.

People form beliefs with the best information available. Often, it is assumed some particular societal deficiency is inevitable simply because we lack the imagination to envision a different solution. You can open imaginations by thoughtfully articulating why the experts are wrong and computers can be small enough and useful in the home. You can also open imaginations by creating the microchip, and making, marketing, and delivering products that use it to better peoples lives.

When you see something unsatisfactory in the world around you, know that the beliefs which sustain it are subject to change. If you want to help humanity forge ahead, create new ideas and new experiences.

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