bursting vs building

There are two ways to think about sales, and this applies to everything from business to politics to teaching: You can sell something in a way that captures people’s attention, which is very effective in the short run but wears off, as attention spans and dopamine bursts expire. Or you can sell in a way that captures people’s trust, which is harder and slower than capturing attention but tends to last longer.

- Repeating Themes (Morgan Housel)

Come on... Who needs trust when you have blockchain? We live in an age where relationships start with a swipe to the right and companies either fail fast or scale quickly. Don't be so old fashioned!

Information wants to be not only free, but also bursty! Why deliver slow while you can deliver fast? Slow processes suck, especially since we have so short lifespans!

Well... I am sorry but I am slow. I like enjoying the time I have here rather than rushing through some potentially longer lifespan.

• People who spend all their efforts on creating a great first impression tend to disappoint horribly afterwards.

• Companies that scale very fast scare the shit out of me as their falls tend to be also very fast.

• Skills that take longer to learn (like negotiation skills as opposed to a technical skill that can be learned by reading a single book) tend to also stay relevant longer.

• Men who can not enjoy the truly lasting qualities in a woman tend to be tasteless and impoverished.

hubris as high mutational burden

Checkpoint inhibitors seem to work best against tumor types and cancers with lots of genetic mutations. Because it is unusual in the body, this heavy mutational load seems to be easier for the immune system to identify as not belonging to ‘self’. Lung cancers triggered by smoking are generally loaded with mutations, and smokers respond to the checkpoint-inhibition therapies better than those who have never smoked. One strategy is to use combination therapies — such as chemotherapy plus a checkpoint inhibitor — to trigger mutations that will make it easier for the immune system to recognize tumor cells.

The Quest to Extend the Reach of Checkpoint Inhibitors in Lung Cancer (Weintraub)

Stronger cancers are easier to defeat. (Who would have thought that smoking can increase the odds of survival?) Strategically speaking, this outrageously counter-intuitive conclusion is actually quiet generalizable.

Making your enemy stronger makes sense in many different contexts. Once the ego inflates and hubris kicks in, your enemy inevitably starts making mistakes, just like a highly mutated cancer cell giving itself away to the immune system. The trick is to reach this state as quickly as possible so that you still have enough energy to act with fury when your enemy makes the fatal mistake. (Remember that you do not need to win every battle to become the final victor.)

Complex systems exhibit phase transitions. Making your enemy stronger can tilt the equilibrium, helping you initiate a favorable phase transition. For instance, as a young adult growing up, you need to rebel against your parents and friendly parents make this maturation process harder. Similarly, as you dump plastic into it, nature needs to learn how to turn this waste into food and eco-friendly policies make the adaptation process harder. As you can not expect to grow up via trivial adversities, you can not expect nature to come up with plastic eating bacteria via occasional exposures.

PS: On a similar note, see the post Against Small Doses which argues in favor of (low frequency) high doses within the (positive) pleasure domain, whereas the current post is focused on (negative) pain domain.

on taking notes

Writing is one of the most important innovations of humankind. Use it!

• Once you put something on paper, you start interacting with it. Ideas lead to ideas and relationships among them become more apparent.

• As time passes, your self-dialogue with the text matures, accumulating small insights that eventually avalanche into a big insight.

• Your embodied memory is finite, but with proper organization you can store an unlimited amount of information in writing.

• Offloading stuff from your memory is relieving, allowing you to focus on new things with renewed vigor.

• Putting open ended ideas on paper allows you to see everything in new light and recognize phenomena that no one else is paying attention to.

• Once an idea is written down, it becomes more real and arises a greater urgency to be completed.

• Once you throw a bunch of ideas together on paper, they start to grow like bacteria samples on a petri dish. Contradictions that we were not clear from the beginning start to appear. Some get dissolved through additional text. Others get dissolved through deletion of one of the initial ideas, just as one bacterial colony enlarges to engulf another.

• Taking notes help you to get to the gist of the matter, compressing and synthesizing information. It is a waste to carry around unprocessed data in your brain.

Business-specific remarks:

• Some boast about their memory and never take notes in meetings, forgetting that writing is not a passive activity. (As in Parkinson's law, people with better memories exhibit a greater tendency to fill their minds with junk.)

• In a meeting you have to write a note anyway, to share it with your colleagues and add it to the collective memory of the company.

• People feel important if you take notes while they are speaking. But, in order to not dilute this effect, you should not take notes all the time. Even the most delusional people know that not everything they say is remarkable.

• If you take notes all the time, then people in a meeting may think that you are a complete novice for whom everything being discussed is new. This may not be a great idea if you are supposed to display an already-built mastery.

success vs failure

Success is defined as the negation of failure. (Until something fails for a specific reason, it is considered as successful.) This negational definition makes it very hard to understand.

There is basically only one generalizable aspect of success, namely its nonlinear nature with respect to time: The longer the success period, the lower the probability of near-future failure.

It is funny how successful people go on stage and talk about their unimaginably poor grasp of their own success stories while failed people are not given a chance to speak at all. Success is one of those things that can not be spoken about. It can only be shown.

Best success stories are concatenations of "How I Almost Failed" stories. Others consist of boring generalizations. After all, as Tolstoy said, happy families are all alike while each unhappy family is unhappy in its own way.

thoughts on shopping systems

A system with one seller and many buyers is called a shop (or an auction if only one good is being sold). When many shops are brought together, the resulting system is called an aggregator (or an auction house). If sellers can become buyers too, then it becomes a marketplace.

If seller side is closed to new entrants (which is always the case in the physical world), then what you have is something like a shopping mall. (Openness creates discoverability problems for sellers who are always willing to pay a rent for compensating the costs of maintaining a closure.)

If buyer side is closed to new entrants, then what you have is something like a shopping club. (Sellers will be willing to offer discounts to have access to such closed-off demand sources.) Shopping clubs collapse if the number of sellers is increased over time and sellers are essentially left competing as in an open system. This sooner or later happens due to competition among shopping clubs who feel pressurized to hunt for more customers and flex their closures. Of course, the irony is that when a shopping club is truly successful and every buyer and seller is in it, then it becomes the whole economy and paying a cut to the club becomes pointless for both buyers and sellers. 

Groupon tried to circumvent this fate by concentrating the demand and spacing sellers across time in return for a deep discount from each seller. It tried to achieve the paradoxical goal of having seller variety without seller competition. Since Groupon buyers moved from deal to deal and had very little loyalty, the time dimension got behaviorally collapsed and sellers again ended up competing with each other.

Groupon could eventually be brought down to its knees (by the sellers who understood what was going on) because it did not appeal to all potential buyers. (A lot of people want to be able choose from a wide variety of options rather than being dictated to a few randomly fluctuating options.) In other words, sellers had something to fall back on.

Amazon on the other hand can only be brought down by regulators because it appeals to all potential buyers. Sellers have nothing to fall back on. (Amazon does not demand a discount from sellers but exposes them to intense competition, which at the end of the day amounts to a not-as-deep-but-a-more-permanent form of discount.)

Some further thoughts:

• Only oligopolistic markets will be able to resist Amazon which started off by killing the competitive bookstore market. By becoming literally the only bookstore in town, Amazon now faces a strong resistance from a coordinating set of publishers from whom it now wants to buy directly. It can either buy its way up the supply chain or become a publisher itself like Netflix did. Former strategy will be expensive since publishers selling their businesses will be asking for very high premiums for defecting and will make Amazon pay the present value of all their future fat profit margins. Latter strategy is tough because of the same reason why Spotify will eventually fail: Creating a music star (similarly a bestselling author) is a much more complicated process then creating a hit movie. (Spotify’s profit margin is tiny compared to that of music producers and it does not seem to scale neither.) Talent discovery is stochastic and talent nurturing is difficult, and neither scales well. (Also there is a lot of consumption of old songs and books - which is not true for movies. So the incumbent producers with deep archives have a competitive advantage.)
• It is easier to sustain a shopping club in a physical environment where one can maintain a locally acceptable level of competition among the club-member sellers by sampling across all shopping malls. (In a virtual environment, there are no distances and competition is always a click away.) That is why shopping clubs usually end up housing only non-virtualizable experience goods like dinners in fancy restaurants etc.
• In a physical marketplace, buyers can not hide. A carpet seller in a bazaar can grab you by the arm and drag you to his store. In a virtual marketplace, on the other hand, all he can do is to harass you with the cooperation of the marketplace itself by using the allowed advertisement mechanisms. So, in some sense, you forfeit your right to be protected from harassment to the marketplace in return for the promise to build some norms and predictability.

success as abnormality

Normality does not breed success, extremity does. This is essentially due to the fact that every activity favors certain character traits and the people who have extreme doses of these traits end up being extraordinarily successful. Of course, not all mentally sick people gain crazy amounts of fame, power or wealth, but those who do are often mentally sick.

Here are some traits I have noticed over the years:
 

Autism

As brain science unravels the roots of investors’ underlying behaviors, it may well find new evidence that the conception of Homo economicus is fundamentally flawed. The rational investor should not care whether she has $10 million and then loses $8 million or, alternatively, whether she has nothing and ends up with $2 million. In either case, the end result is the same.

But behavioral economics experiments routinely show that despite similar outcomes, people (and other primates) hate a loss more than they desire a gain, an evolutionary hand-me-down that encourages organisms to preserve food supplies or to weigh a situation carefully before risking encounters with predators.

One group that does not value perceived losses differently than gains are individuals with autism, a disorder characterized by problems with social interaction. When tested, autistics often demonstrate strict logic when balancing gains and losses, but this seeming rationality may itself denote abnormal behavior. “Adhering to logical, rational principles of ideal economic choice may be biologically unnatural,” says Colin F. Camerer, a professor of behavioral economics at Caltech. Better insight into human psychology gleaned by neuroscientists holds the promise of changing forever our fundamental assumptions about the way entire economies function—and our understanding of the motivations of the individual participants therein, who buy homes or stocks and who have trouble judging whether a dollar is worth as much today as it was yesterday.

Gary Stix - The Science of Economic Bubbles and Busts

Assuming that rational investors always beat the irrational ones in the long run, we can conclude that fortune favors the autistic. On a related note, being successful in business also requires a lack of empathy to the degree of being autistic.
 

Obsessive Compulsiveness

This disorder can fake passion when it is absent and fuel grit when it is low, and thereby tremendously help a budding entrepreneur. Obsessing over details can sometimes cause dead-locks but can also act as a pillar for the kind of perfectionism that distinguishes the best entrepreneurs and designers.
 

Narcissism

"Appear as you are. Be as you appear." said Rumi. Good advice for humans, but horrible for corporations. There is an entire department called brand management, dedicated to make sure that this does not happen. Same goes for modesty etc. In fact, ideal corporations are expected to display all the defining features of narcissism. (e.g. an inflated sense of self-importance, a lack of empathy for others, a fiercely independent attitude)

According to object relations theory, narcissistic people find the experience of need and dependency to be unbearable; as a result, they develop a set of psychological defences that embody an extreme form of anti-dependency. I don't need anyone. I can take care of myself because I already have what I need.

The Narcissist You Know - Joseph Burgo (Page 106)

That is why narcissist CEOs are the best. They envisage the whole company as an extension of themselves and do their best to minimize their dependency on employees so that no one can exert independent political power. To achieve this, such CEOs employ all sorts of operational software to suck any remnants of unique and valuable information the moment they are generated, meanwhile using all sorts of tricks to ease employees' existential anxieties and fool them into thinking that they are unique and valuable.
 

Bipolarity

It is no surprise that bipolar disorder is very common among successful entrepreneurs. It is the biological embodiment of the following two best-practices in business: 

• Growth periods (manias) should be followed by pruning periods (depressions).
• Every important decision should be evaluated from both a best-case (manic) and a worst-case (depressive) perspective.

Also bipolarity gives one an ability to freely trade energy across time. One can enjoy additional bouts of positive energy today by creating equal amounts of negative energy in the future. (Imagine an asynchronous version of the matter-antimatter creation process in physics.) Bipolar entrepreneurs can better navigate the highs and lows of the business landscape because they can gear up during the low periods and gear down during the high ones. (Entrepreneurs absorb external variations to create internal constancy for their team members who can then build the necessary functionalities.)
 

Psychotism

Apparently there exists some studies backing the common belief that insanity and creativity are closely associated. If so, why are so few of the successful scientists psychotic? After all science is a very creative discipline, isn't it? Here is a possible explanation:

Why are so many leading modern scientists so dull and lacking in scientific ambition? Answer: because the science selection process ruthlessly weeds-out interesting and imaginative people. At each level in education, training and career progression there is a tendency to exclude smart and creative people by preferring Conscientious and Agreeable people. The progressive lengthening of scientific training and the reduced independence of career scientists have tended to deter vocational ‘revolutionary’ scientists in favour of industrious and socially adept individuals better suited to incremental ‘normal’ science. High general intelligence (IQ) is required for revolutionary science. But educational attainment depends on a combination of intelligence and the personality trait of Conscientiousness; and these attributes do not correlate closely. Therefore elite scientific institutions seeking potential revolutionary scientists need to use IQ tests as well as examination results to pick out high IQ ‘under-achievers’. As well as high IQ, revolutionary science requires high creativity. Creativity is probably associated with moderately high levels of Eysenck’s personality trait of ‘Psychoticism’. Psychoticism combines qualities such as selfishness, independence from group norms, impulsivity and sensation-seeking; with a style of cognition that involves fluent, associative and rapid production of many ideas. But modern science selects for high Conscientiousness and high Agreeableness; therefore it enforces low Psychoticism and low creativity.

Bruce G. Charlton - Why are Modern Scientists so Dull?

desirability of sudden death

When we witness people dying slowly under painful conditions, we wish for our future selves some form of a sudden death. A beautiful heart attack for instance.

This desire is baseless though since sudden death is always available in the form of suicide. The entities doing the dying always prefer a slow death, while those doing the witnessing always prefer a sudden death.

Same holds for companies. When a company goes suddenly bankrupt, people working for it feel very disappointed. Their years of work is gone without an explanation, without being given a proper chance of failure. Same people, when faced with a competitor refusing to die despite repeated close calls, will feel agitated and murmur to themselves "Come on, just give it up."

ikigai intersections

Check out the following diagram. (Hat tip to Pelin Urgancilar for sharing it with me.)

For reference see this blogpost by Paul Campillo

The trouble with these sorts of ikigai illustrations is that they do not display the level of returns.

What people will pay the most lies mostly outside of what you want to do. Hence you will get rewarded less if you move to the intersection of blue and pink circles. What you can do now is probably what everyone else can do equally well as well. In other words, you need to invest in yourself to qualify for what people will pay the most. Hence your returns will decrease even further if you try to move to the intersection of all three circles. (A better label for this middle area would be "Happy & Average!")

In short, the more circles you intersect with the more sacrifices you will have to make. People stay away from the middle, not because they are lazy, but mostly because they feel the trade-offs involved with the process.

hiring juniors

Hiring juniors always involve trade offs. 

• They are more loyal if they stay. (They owe so much to you for their professional growth.) But they may leave right before your investment starts paying off. In that case, you are left with a huge net negative value in your hands.
• They are more passionate. But this passion comes mostly from their inexperience.
• They are more energetic. But after a while their misdirected energy becomes a headache.
• They are cheaper. But they do everything more slowly and with more mistakes. 
• They have less ego. But this may result in their voice being drowned out in meetings.
• They are easier to manage. But they require more micro management which can become tiresome.
• They are easier to find in the market. But this is mainly because they are the small fish. (The big fish are always harder to catch.)

For these reasons, although I enjoy talent discovery tremendously, I often find myself in situations hiring expensive seniors rather than taking a risk with juniors.

real-time mentorship

Quality of your mentorship skills can only be gauged real-time.

Researchers and entrepreneurs fight on the frontiers and frontiers are by definition unique territories beset with unique problems. Therefore, you can not mentor these people in pre-packaged formats (e.g. lectures) in artificial environments (e.g. classrooms). You need to go to the battle with them, shoulder-to-shoulder.

What distinguishes the mentor from the mentee on the battle ground is the speed of problem solving. Mentor too learns alongside the mentee since the problems at the frontier are always unique and new. His only difference is that he learns faster.

Mentee who sees the mentor in action learns better since learning is essentially a mimetic process.