Daily Blogs

The Network Effect of the Stock Market.

Network Effects are powerful. I’ve written about them here, here, and here.

Right now, there is something historical happening in the stock market. A group of retail investors is pushing a stock up against hedge funds who had shorted the stock driving the GameStop company towards bankruptcy. If you’re not into stocks and haven’t heard about it, Google GameStop or GME stock chart and look at it’s multi-year chart, you’ll see something doesn’t look right. This event will no doubt be a lesson taught to finance majors about risk management in the future. It’s also a powerful look at network effects. Before we talk about that though, if you’re not familiar with investing you might ask, what is a hedge fund?

A defintion found online is: A hedge fund is a limited partnership of investors that uses high risk methods, such as investing with borrowed money, in hopes of realizing large capital gains. Basically, they pool a bunch of money together from investors who might be lawyers, doctors, business owners, old money, and possibly roll in some bank loans, then they use that pool of capital to hire smart financial minds to make investments. For their efforts, the hedge fund takes a share of the profits, and returns most to the original investors pockets.

So what is a hedge fund really? It’s a network of money. And when networked together, that pool becomes much bigger, much more powerful and is able to manipulate things against smaller investors. What are some ways they can manipulate things?

  • Stock ratings,
  • tweets by people following these huge pools of money,
  • network shows having them on to share their feelings about which way the market is flowing,
  • and also they can use huge amounts of money to directly manipulate share prices by short selling to drive prices down, which they then buy up again and sell at higher prices.

It’s the huge backing of money that gives the hedge funds so much power to do things even a person with $100,000 or $1,000,000 to invest can’t dream of, let alone people with much smaller amounts than that. For decades, maybe centuries, these companies told the little guy, “You need to invest with us. Sure, we’re going to take fees, but you’ll be protected with us, against the other big players.” Doing so gained them clients, earned them fees that could have gone into a retail investor’s pocket, and kept the wheels turning for them making many of them very rich.

Then the internet happened. Then interactive trading platforms happened. Then commissions and fees started to disappear to stay competitive while social media grew. Then something magical happened, small investors started finding themselves communicating with other small investors. Their collective moves started to have power on the scale of hedge funds. After all, hedge funds are just a network of money. The only difference between a hedge fund and a huge collection of retail investors now is that the hedge funds collect salary for their work, and they have fewer management people making decisions.

It turns out that when normal people connect, share, and put their efforts towards the same goal, they are extremely powerful. Today, the stock market, at least the institutions that have represented it for decades, is learning how powerful a group of like-minded investors can be.

This isn’t limited to stocks. This is everywhere. Institutions are only institutions because people grant them, prestige, power or resources. The ability that exists today to connect with others is allowing everyone to remake the institutions that were previously untouchable or seemed to be something that couldn’t be replaced. Power is always in groups. If you aren’t connecting people, ask yourself, “Why not?”

What is None of This is Right?

I’ve been at this site for over two years. I’ve missed a few days in there, but this week I will hit my 700th blog post.

I feel like that’s quite an accomplishment, but there is still a long way to go. When I started writing this blog, I thought it would focus on a certain topic. I started trying to lay out what it would be, but then I found I didn’t gravitate towards that as much as I thought.

The title has always meant the same thing to me, that there is plenty of room in the world for taste and opinion. That not everything has an answer to it. I could have just as easily called it All of this is Right. Of course, that’s ego-centric, and what happens when it turns out you are actually wrong?

It gets hard to keep going.

The title was partially meant to be a motivator to myself. That just because I may be wrong, doesn’t necessarily mean I should be quite or keep to myself. That debating, pondering, thinking, reading and writing are the necessary steps to grow as a person and as a society. I still believe that.

Today, the tone of this blog has become a bit more clear to me. I have training in engineering, so I believe in being accurate, backing things up in fact, running the numbers, and being confident in your predictions. However, my personality runs counter to that training. Everywhere I look, the biggest problems and challenges have obstacles that aren’t something that can be solved with an equation. These are the challenges that get at the heart of being a human. A challenge that many people shrug off. A problem that is going to be exacerbated in the coming years as technologies like software, AI, self-driving cars, robots, and more push us to find more and more of the work that is human and can only be done by humans. There may come a point, when anything that has a definitive answer will be handled by technology, and only uncertain things are handled by people.

That’s what I’m aiming to show people. Where are the spaces where people can do the work? Where can people be valued? Where can people live and do things they are proud of? Where can people have dignity? Where can people engage with others who are also interested in the same things?

None of this is Right is a blog about taking a chance, using creativity, making tradeoffs, finding a place in the world that is uniquely for you.

P.S. I got more out of writing this blog than you did reading it. After about 700 posts focusing on others, I hope that’s okay.

The Persistence of the Horsepower Unit.

Institutions don’t like to change their standards. When cars and more generally, engines, were invented, measuring in horsepower made sense as a means of comparison. Horses were the means of heavy lifting for things like pulling loads, or plowing fields. Giving the customer a sense for how a car compared to what they knew made sense.

Horsepower isn’t an easily applied unit in engineering. It’s generally converted from something like watts, which is the metric systems unit for power. As a result, horsepower is a remnant of a time gone by. It’s purpose was for the average consumer to understand the comparison to the animal they were replacing. Today, we live in a society where the average person has no horse experience and the comparison only makes sense in horsepower because previous generations of vehicles were measured in them. To compare performance to those older models, keeping the unit makes sense.

Let’s be clear though, measuring things in horsepower these days isn’t because it’s a good unit of measurement. It’s ONLY because institutions resist change. Tradition is holding the horsepower as the standard unit of measurement for vehicles and nothing more.

There are two things to draw from this:

  1. It’s possible to create something that will last because people like things like this, and because it becomes a tradition.
  2. To bring about a better way to do things, at times, it’s important to kill those traditions.

For #2, I won’t say that the horsepower is holding back the vehicle industry, but there are certainly other issues facing the world where tradition holds us back. That only happens if we let it.

Forgetting why

History doesn’t repeat, but it often rhymes. Society, government, and organizations don’t have the same kind of memory as a person. That’s because they are made up of many different minds. Minds that come and go. That live and that die. Eventually, the reasons why certain policies, regulations and political stances were taken in the first place are forgotten.

We are seeing ramifications of this all across society. Britain exiting the European Union was an example of this. The British forgot why the union formed in the first place. Some other spots that are examples of “forgetfulness” of society are:

  • Anti-vax movements forgetting through never experiencing how bad certain diseases were.
  • Hate for the inefficiency of Social Security. Forgetting about people dying in the streets or being completely destitute in old age due to economic and health forces outside their control.

In the future, if the next pandemic hits long after we are gone, it would be nice for society to remember what happened during this one, using that knowledge to their advantage and avoiding the pitfalls that our current society fell into.

It’s easy for a person to remember the reasons why they made certain decisions. It’s next to impossible for an organization to have this type of memory, but it can be valuable to try to institute programs that help maintain it.

I’ve never been upset about cleaning up the kitchen.

After a busy day, it’s easy to feel tired, that you can’t do much more. I definitely think that can be true at times with the heavy critical thinking, or creative type work. However, it’s possible the toll from those tasks is keeping you from realizing there is low effort work that can be done.

Sometimes after a really exhausting day, I leave the dishes for the morning. Generally, it doesn’t help anything. It starts the next day off a little more hectic than it would have been otherwise. In the cases, where I pushed through the malaise of exhaustion, never once have I regretted it or thought, “That extra 15-30 minutes of sleep would have been better than doing those dishes last night.”

Often times it seems like if we only put in more creative time, more of the heavy lifting, then we’ll be happier, get where we want to go, and be successful. More often, it’s actually small acts that are simple, that line up the rest of the time in our lives, that makes us happy, safe, and secure that lead to the powerful outcomes.

If you’re stressed, and overwhelmed, tidying up might be a great place to start. Once your mind is clear of that, it can be easier to move forward.

Assets and liabilities

In finance, it’s clear what is an asset and what is a liability. Assets make you money, liabilities cost you money. In realms outside of finance, particularly when it comes to knowledge and experience, there is a blur where someone thinks an asset exists, there is actually a liability.

Imagine thinking that because 25 years ago electric cars weren’t ready to become mainstream and various initiatives from government and automotive companies failed, that they will fail today. That’s ignoring much of the initial conditions of the problem. 25 years ago, much of the electrical grid was still based on fossil fuels, switching to electric vehicles just moved the source of where the fossil fuel was combusted. Today, solar, wind, and other renewable energy sources are making a larger contribution to the total electricity generation than ever before. Not only that, the cost to produce these technologies has dropped drastically as they have become mainstream.

Yet, there are many that persist believing that things won’t work out this time because they didn’t work out decades ago. As if the world stands still. Experience is something that is usually seen as an asset. You’ve gained wisdom. You are more likely to see your endeavors correctly. However, if your past experience was failure, or something that prevents you moving forward because you can’t correctly identify the changes in the world between that previous experience and now, it is a liability.

The great thing is if you recognize it, you can turn your experience from that liability back into an asset. That’s not true in finance, a debt is an obligation no amount of recognition or wishing will change that.

When cooking Beef Wellington…

chill it in the fridge for a while, maybe even overnight before baking.

Why is that so important?

The starting temperature should be consistent. We aren’t super concerned with the starting temperature of a beef roast, it could be left out for 20 minutes, an hour before roasting, or put in straight from the refrigerator. Why is it different on the Beef Wellington?

Well, you can’t see the beef for one, it’s hidden by pastry. You can’t touch it to check it like you can a roast, it would destroy the pastry it’s wrapped in. You’re relying purely on instinct, how much time you think is correct. A normal roast adds more methods to check and be sure it’s being cooked properly. Most people enjoy that security, the ability to measure something against their instincts and ensure they are correct. There are plenty of life situations that fly in the face of that. Where there are no measurements, and faith is what you have to go by. What can be done in these situations?

The equivalent of chilling the Wellington. Minimize the variables.

  • If you’re starting a project or business, minimize the expenses.
  • If you’re starting a new job, make sure that you take the time to know what the job is.
  • If you’re going move across the country, make sure you know what it’s like there.

Just because you need to rely on instinct, doesn’t mean you can’t minimize your chances of that instinct being wrong. Don’t let the unknown stop you, just figure out the steps that make your instincts more likely to be accurate. Starting from the same temperature all the way through the dough and meat means that your cook time is more likely to be consistent if you repeat a recipe. What’s the equivalent for your situation?

Generalist vs. Specialist – Finding Meaning in Work.

There is a chasm for finding meaning in work. On one side, people want to see the impact of what they do. They want to contribute and make a difference. On the other side is all the things that need to be done, each requiring a specific skillset to make it happen.

At times, it’s fun to be the generalist because all items belong to you. You see the input, you see the work, you see the output and the meaning behind it. This generalist is the one man shop. The business owner who finds clients, sells work, does the job, and repeats for a living. The struggle for most is that this is exhausting. Our brains have to switch between many different tasks, and some of them we are less skilled at then others. Which is why as a society we came up with specialization. A certain job with a certain skillset. One that can mastered, made efficient, and where the worker can bring significant leverage by dealing with the same problems over and over. The problem here is you only see a specific input and a specific output, and finding the meaning in the work may be much harder.

I’ve seen it online, heard it in conversations, and think about it quite a bit. There is a growing discontent with the corporate world of work. It’s a social problem that needs some sort of resolution, or at least acceptance. Most of the discontents don’t even quite understand themselves what they are upset about because when reflecting on these thoughts, the human condition is one of work. If we didn’t live in a society, would we be free of work?

Of course not.

Here’s a list of work to be done:

  • Food to be grown, gathered or hunted
  • Food preparation and cooking
  • Clothing to be made
  • Shelter to be built
  • Materials to be harvested and shaped
  • Weapons/protection to be made
  • Fires to be built

Make no mistake, this is work. However, it seems many people are now daydreaming about this sort of thing. Why? They see the meaning in it. The meaning is, “It allows me to survive.” Somehow their brains aren’t associated specialized work with that same meaning, even though it is. Society is doing all of those things above, it’s just splitting them up over people with different skills.

This chasm is only something that is likely to grow. I see it in the world I’m in. Technology is growing more complex, ever more specialized people are needed to work in narrow fields as it takes more learning to understand the state-of-the-art in these fields. That increases the effect that fewer and fewer people can see the meaning in their work.

What’s the answer?

I don’t think there is only one, but here are a couple of thoughts:

  • Your work is part of a bigger system. You do it so you can survive, and it contributes to the work of others that are part of the same system. That’s okay.
  • If you want to see the meaning, take on a more generalist role. Something that let’s you see it all. This could be a different job, or it could be starting your own business.
  • If you can’t accept those first two points, spend a couple weeks camping with not much by way of materials. It may change your outlook.

Chrysopoeia

That’s the word for the transmutation of metals into gold. It’s what many alchemists throughout history were working on. Don’t get me started on it’s pronunciation.

Chrysopoeia is an interesting study in picking the right problems to work on. What if the alchemists studying Chrysopoeia were successful? They would be rich, right?

Possibly. Maybe even most likely, at first.

However, why is gold valuable in the first place? Well, a few reasons are:

  • It’s has a nice luster
  • It’s very malleable and ductile making it easy to craft.
  • It has good conductive properties and high density.
  • and, most of all, it’s rare.

In fact, for that last point, it’s been estimated that all the gold in the world melted down would fill a 70’x70’x70′ cube. There are many larger than that size. Think about how much iron in the form of steel there is in all the buildings of the world by comparison. It dwarfs gold. What would have happened if alchemists were successful?

They would have devalued gold. Gold would have been able to be produced in quantities much larger than it was mined in, and eventually as the world’s supply increased, the value of gold would come down. Perhaps the first alchemist to discover this method would be obscenely wealthy, but over time if others found out the trick, the value would plummet.

This is a problem where the early and the first successful person get the huge rewards, and after that it fades. It’s the massive speculation type problem that either ends in disappointment, or massive success. Not much room in between.

For most people, this isn’t the type of problem you should be seeking to work on. This is the type of problem that is going to end in heartache and disaster for 99.9% of people.

Compare this method of making money to painting pictures and selling them. Once you land on a subject matter people like, you can sell and make a living. If more people see them and want them, you can scale your sales. If copycats move in, you can create new works to differentiate yourself. That’s not possible with gold, after all gold is gold.

We all pick the types of problems we want to work on, the risk levels, and the rewards that are required for us. Don’t get stuck in a problem that doesn’t fit you. If you are risk-adverse, don’t pick Chrysopoeia to work on. If you are huge reward motivated, give it a try. Pick the problems that work for you. For me, I like ones that are:

  • Workable at any scale
  • Highly differentiable
  • Low cost to entry
  • Have some level of scalability to them

You may have different criteria, adjust appropriately.

Something everybody wants vs. something one person may want.

There is value in making something that’s useful for everyone. Of course, when you see this opportunity and are successful in it, many other businesses will want to serve that market too. Large markets always attract large competition.

It’s ironic because when someone sees an opportunity in a large market, more often then not, they think it is the correct way to go. However, competition tends to balance all markets. Large markets have large competition. Small markets have small competition.

What size market to serve then really doesn’t have to a be a question at all, as long as there is some sort of market for the work you do.

If you are a table maker, you could make a design that is easily reproducible and create hundreds a year to make a living, or you could produce a handful, each with enormous skill involved and many different unique details. The latter kind of tables are the ones that are going to sell for five figures and that require the right eye to appreciate them.

In modern society, we have what is likely an excess of the first category of mass production, and a shortage of the second. One reason for this, is up until about twenty years ago, we didn’t have the medium of connecting those in small audiences with their target audience. Today, we have the internet and social media. The common wisdom hasn’t caught up.

Artists transform data.

When you’re kind of sure about what you want, but you know you don’t have the skills to do it, you go see an artisan. This could be a birthday cake with a theme, you’re not sure how to deliver it, or what you envision entirely, but you want that creative baker down the street to create a masterpiece for your child’s special day.

This is in opposition to the work a computer can do. For example, a computer can take a picture of an eagle and apply filters to make it black-and-white. That’s a shift in data too, but the difference is form. The computer took an input, applied an equation and produced an output that was related to the input in specific terms. In fact, it’s likely the process could be discovered and reversed if desired.

The bakery example isn’t quite the same. The baker took a briefing in the form of a note or conversation and ended up making a cake from it. Someone looking at the cake may not be able to tell you exactly what the input was. It will likely be less obvious then the transformation of the picture by the computer.

The less obvious it is to see how the transformation is applied, the more artistic and the more valuable the person doing that work is. If your work is a simple equation, no one will value it, and someone is definitely working to replace it. It’s better to work in the areas where there aren’t simple answers and known steps.

“I imagine death so much it feels like a memory.”

That’s a line from the Broadway show, Hamilton. It was spoken by Alexander Hamilton himself in the play.

It’s an interesting thought because I’ve often imagined certain aspects of my life so much that when the actual time came it felt like deja vu. To some extent, most people have something they think about over and over again. Reflecting on this applied to a group or organization, there are certain conversations I’ve had in my current company that have come up so many times that when we get there it will feel like a memory.

When something in the future feels like a memory, it shouldn’t be ignored. It should be embraced. Action should be taken towards it. How will you ever stop thinking about it unless you make it come true? These visions are guideposts.

In Hamilton’s case, it was unfortunate that it was related to death, but if he knew how he wanted to die, that still informed him on how he should live.

When you are blessed with foresight such as this, don’t shun it, don’t waste it. Embrace it. That’s hard as an individual, but harder as a group. If you’re part of something bigger than yourself, drive these “memories” forward.

Professionals deal with failure.

No, not their own necessarily, but what happens when something goes wrong.

Building software is about handling the edge cases. When someone learns to write software, the easy part is usually the core functionality. The hard part is stability, edge cases, exception handling, error messages, etc.

A mechanically-inclined high school student could probably weld together a frame, strap on an engine of some sort and build a vehicle. Of course, that design likely would have no safety features built in. No containment for a failing engine. Not much in the crash testing realm. It would likely be lacking in any sort of self-diagnostic capability.

Both of these examples are the work of amateurs. The core function is often the easy part, but that’s not the work of professionals. The work of professionals is where the normal things breakdown. Where the difficult decisions lie. Where the tradeoffs are, and how to handle things that don’t go the way they should.

The Search for Contributors

I’ve always sought to add to others’ endeavors wherever I can. Often times when I had ideas, connections, or skills that could add something to others works that I was made aware, and I would reach out and let them know that if there is any way that I could help them, then I would, usually for free.

Not many people took me up on it.

Today, as my blog readership is growing and there are a few places I participate online, more people are reaching out to me, asking if I’m willing to be part of their group, or their community. While I now would love to, I’m as busy as I’ve ever been with working, blogging, and my family. Time is finite, so all the commitments become impossible.

A difficult thing to do is find people that can add value to the work that you do, or the work that your company does. One of the reasons these people are hard to find is because they either are already busy adding value in other places, or they are busy building something quietly for themselves.

When someone sees the value you bring, it’s a rare and beautiful thing, it should be cherished on both sides and each party should be treated with respect.

Birds aren’t real.

In a certain area of the internet, which shall not be revealed here, there is a group of people who believes that all birds aren’t real. Not that they have never existed, but that since decades ago, the government has been killing and replacing birds with devices meant to spy on people.

I don’t THINK this is a mainstream belief, but I haven’t actually asked many people if they actually believe such a thing. The point here is two-fold:

  1. We live in a time of the largest amount of information being available ever.
  2. Not all information is correct.

Taking great care on what to accept and what to reject is more critical now than it has ever been at any point in history.

I stumbled upon this part of the internet accidentally while researching something else entirely. It appears that it started as an experiment to prove that on that internet nothing can be made satirical enough to not have people start to believe as fact. They were correct.

This is another reminder, how we communicate our ideas and our intent in an era of mass communication is crucial.

What am I optimizing for?

Optimization works well when there is a goal. Optimizing for price is one way to setup a business or project. You want to offer the cheapest, then find the cheapest materials, the cheapest employees, the cheapest location, the cheapest everything and then market it up by the smallest amount that will allow you to stay in business.

Here are some other things you could optimize for:

  • Responsiveness
  • Customization
  • Ease of business
  • Quality
  • Happiness
  • Creativity

Most people never even pick an optimization at all. That makes it hard to make any real decisions.

Football on Nickelodeon.

Nickelodeon is a kids television station. They play cartoons and kids shows. Generally, you wouldn’t think of them broadcasting something like a football game.

Yet, they just broadcasted their first NFL game.

It’s interesting because they used modern technology to broadcast the same game as other big networks but add in graphics, cartoon characters, animations, etc. the appeal to kids. Making the game just a bit more interesting for kids so that they don’t ask daddy to change the channel for cartoons while he is trying to watch.

It’s an interesting experiment. It takes something that we all can watch currently, and offers a differentiation on it. A more whimsical, and fun spin on something that is generally serious and competitive.

It’s interesting where technology and creativity will take us in the future, but one thing is certain, there is room to do much of what we already do, but differentiate in more ways than we ever thought possible.

Programming, Loops and How People think.

If you’re familiar with programming, you’re familiar with loops. Where you loop through an index of items an perform a task or set of tasks in each loop.

Our brains work like this too.

We have a loop for the daily chores.

We have a loop for tasks at the office.

Sometimes, if we’ve focused on improving ourselves and being more balanced we have a loop for exercise, cooking and nutrition, family time, and other interests.

We can also have a loop for our purpose in life.

If you think about a conversation, we even have loops in conversation. We started out debating a single point, as other points are made, we debate those and so on. If you go off on too many of these tangent loops you eventually forget the original point you were debating at all. This is common in unstructured conversations.

Every time we add a new loop we add a significant amount of mental brain power and possible exhaustion to our life. It’s why focusing is so important. For just a little example, let’s say every loop of yours has even 3 items in it. A loop of 3 items each having 3 items in it is 9 items. Adding a higher level loop of 3 makes it 27 items. Another loop makes it 81. This is how people get quickly overwhelmed with too much going on in their lives.

A quick thought on this:

If you can remove an entire loop from someone’s lives, their brain becomes much less exhausted because of the math above. This is where you are seeing food delivery, fresh produce delivery and other nutrition based programs growing in popularity. It’s why apps with exercise routines built-in are becoming hot-sellers. It’s why hiring someone who needs little input and direction has always been in-demand.

If you’re stressed, break some of your loops. If you want to be valued, break the loops of others.

The difference between me and a comedian.

I say funny things some times that may people laugh in the moment. They are almost always something I noticed about a funny situation we were discussing. I don’t particularly ever think of jokes. I’m not a comedian.

In some presentations I have thrown in some funny slides to break up the monotony, but in the future it’s possible the writing on this site, and in longer articles I write could be improved through some good humor.

So I checked out a book. For me, reading the comedy written by a stand up is incredibly refreshing, though we all can recognize stand up comedian, see it written down for me, ables me to see patterns and structure.

The thing that I noticed the most is that the comedy writing is bit of the inverse of my normal writing, which I would summarize as “stating what we all see, but codifying it in a way that’s easier to communicate.” Comedy is more, “stating what we all see, but drawing an entirely unusual conclusion from it.”

Here’s a few ideas to take away from this:

  • Learning a new skill may add to your current work.
  • Consuming a different form of a medium may allow learning in a different way.
  • A dash of the inverse of your work may add depth to it, much like adding vinegar to something salty, or sugar to something spicy.

P.S. Don’t expect joke after joke here, that’s not really what I do. This is just something I’ve been thinking about.

A reminder about world-views.

Thousands of years ago, if you were in a hunter-gatherer society, you may want to share. It’s valuable because when hunting, there is always a bit of luck involved in landing your next meal. Each and every time you hunted required luck to come across the animal you were looking for, make sure that they didn’t sniff you out, and then make sure you are able to get the right shot in. If you can share when you bag a big animal while others came back with nothing, then perhaps they would do the same for you in the future. This would eliminate much of the ups-and-downs of each individual’s success.

At the same time, if you were a farmer, provided you put in the effort to plant the seeds and reap the harvest, barring a bit of bad luck, you had food. Sharing with others who weren’t willing to put in the effort may have been frowned upon because they could have worked too and had a steady harvest. It wasn’t bad luck. It was their effort that was the issue.

In this same vein, there are people with many friends and family to lean on, and people with few.

There are people in modern industries that are cyclical, and people in industries that are rock steady.

There are people in positions where failing leads to no further chances, and there are people in positions where there is always another chance.

The sum of these types of situations form our worldview. Just because someone believes a bit different than us, doesn’t always make them a bad person. They just have a different situations forming their world-views.

Prime Numbers and New Work

We have no idea how many prime numbers there are, or if they are infinite.

We have no idea how many new fields there are to be invented or worked on.

In many ways there is a relation between the two. Something like making a comedy show and distributing it have “prime” functions involved. You need to bring together comedy, broadcasting/networking skills, video editing/production, set design, makeup, clothing design/wardrobe, and possibly a whole list of other “prime” skillsets to make the show something special.

It seems like the world is running out of “prime” skillsets. That machines are taking those over. What the world isn’t running out of things made by combining those skillsets together to make something new. The world is full of infinite possibility in that regard, just as we can keep counting for nearly ever, even if we need to eventually create new terms for numbers of astronomical size.

If you ever feel trapped, or out of possibilities, realize it’s only a phase. If you’re vigilant, put in some effort, even as simple as learning a new “prime” skillset, your world may open up with an imagination full of new possibilities.

Two years to write 5 minutes of comedy material.

That seems ridiculous doesn’t it?

If someone said, “I need you to write an amazing set of jokes that fill up 5 minutes, you have 2 years.”

Many people as long as they had any amount of humor in them, would likely think, “Two years is a long time. 5 minutes is like three or 4 jokes. I can do this easy. Heck, I could probably do it in much less time.”

Yet, 5 minutes of killer comedy on YouTube could send your brand soaring. How many people skip doing this?

And it doesn’t stop with comedy. It could be writing. It could be a show. It could be making a product to sell. It could be programming software or a game.

The time we have is immense. The tools we have to create, share, and educate ourselves with are a 1000X more powerful than any other time in history. Yet, we shirk our opportunity.

Perhaps it’s motivation. Many people find it much harder to be motivated for themselves than for others. They like being an employee because they get to help someone live out their dream. And that’s fine. Yet, still we don’t take these tools and the opportunities to help on that end very often either.

It’s not the tools. It’s not the time. It’s the fear. Maybe, we’re not that funny. Or not that smart. Or not that interesting. Maybe, we have nothing useful to add.

At best, we have no idea. We don’t know you’re not funny until you show us that 5 minutes. At worst, you’re denying how truly funny you are. The same is true with the other endeavors I mentioned.

We have plenty of time. We have a lack of courage.

Be brave. Do the work. Especially the work that might not work.

ROI on LED stoplights

My wife was just telling me a story about how the municipalities around us replaced the incandescent stoplight bulbs on the streets with LEDs, citing how much electricity use they would save. However, they didn’t realize the heat that incandescent bulbs put off melts snow in the winter, so the bulb is always visible. In their first year, the LEDs are covered up by snow storms and seeing the lights is hard, or impossible in some intersections. Now, each brand new light needs a heater added to it to melt snow.

When they calculated the return-on-investment for LED replacement, they calculated all the saved electricity. However, some of that saved electricity now needs to be diverted to heaters to melt excess snow. If they add intelligence to make them only turn on as needed, that will still produce savings, but again will cost more. Missing this in the original calculation makes the whole Return-on-Investment incorrect. The cost/benefit analysis may not even be in the right ballpark now to the point where if they hadn’t already done the project, they wouldn’t move forward with it under the new calculation.

This is common in the world. It’s far more common than we think. Most people value nearly everything incorrectly. That’s what a market is. How often do you think someone sells a car and one person walks away paying too much, while the other person received more money than they should have? Every time if you ask enough people. That’s what a market is.

If you want to be someone who makes good decisions, it’s imperative to learn to use as much creativity and empathy as possible to see all of the “intangibles” that others don’t. Forgetting heaters is easy when the previous stoplights didn’t need them. Thinking through all the assumptions being made is imperative, and it’s hard work. That’s what makes it valuable.

P.S. It also might be that when you are dealing with people, this is true as well. The last person maybe didn’t need praise. The last person maybe didn’t need training. The last person didn’t need any resources. The current person isn’t the last person, don’t treat them that way.

The relic of the paperweight

At one point in time, there wasn’t modern air conditioning, however, there was fans.

People who wanted relief from terribly hot weather may have had many fans moving air in a cramped building or house to remove the excess heat, and create airflow that along with a little sweat cooled people. This created air movement indoors that may blow papers around, so we create the paperweight. A small decoration to keep things grounded.

Then comes air conditioning. Much less air movement, but actual cold air mixed into the existing hot air. Now, fans aren’t needed, yet the relic of the paperweight persists for a long time to come.

Businesses, culture, ideas, and inventions often persist long past their expiration. The world shifts and we forget all the related items that cascaded from the previous systems. Many items take decades for the average person to notice it no longer matters anymore. Paying attention and actively reflecting on the past can make sure you don’t make decisions that are based on past assumptions that are no longer true. We’re in an era full of those.

Who picks out the cars for Jerry Seinfeld?

On the show Comedians in Cars Getting Coffee Jerry Seinfeld picks up other comedians in a different car. Every episode the car represents the guest on the show in a way that Jerry loves to tell them about.

This job can’t actually be delegated. You need a car guy who knows all of these famous comedians. Jerry must do this job himself.

In life, it’s easy to think, “I’m waiting to get to a point where I can pay/delegate all the work to everyone else.” The reality is, the most important work, the work we would like to do is the work that no one else can do for us. Finding others that can add to the work we do is rare and should be valued.

Possibility isn’t reality

It’s possible to make a million dollar a year.

Most people won’t.

That doesn’t mean you can’t, but seeing the possibility that the results could easily fall on either side is an important distinction. Just because the product took off, it could have failed just as easily as the guy one business over. The right factors have to collide at the right times for success. It’s not just smarts at work. It’s also the economy. The culture. And more variables than we can compute.

When you are turning those daydreams into reality, it’s important to it may fail, and that doesn’t make it useless. Here are some things that will still happen:

  • Skill increases from doing the work.
  • An increase in your portfolio of past work that you can show off.
  • Learning about what sorts of variables matter the most to improve your odds on the next attempt.
  • A few stories and a shift in worldview. These happen inevitably and are valuable.

Possibility isn’t reality, but that shouldn’t deter you. Reality itself comes from the overlap between what’s possible, what people attempt, and what sticks. Without people attempting, there is nothing. We need you to do it.

All the things I learned studying personality types.

I’ve spent a few years of my life interested in personality types like MBTI and enneagram, reading about and reflecting on interpersonal interactions with what I’ve determined in mind. I will say it’s been quite an eye opening experience. I also have had the good fortune to have a job where I cross many (hundreds of people a year) different personality types.

Here are all the things (I can remember) that I’ve learned:

  • Whether to appeal to the “world’s benefit” or to an individual’s “personal benefit”
  • How personality types generally split people into political groups
  • How personality types shape a person’s main “goal” in life.
  • Whether to focus on the big picture or the details when talking to someone
  • Why my wife and I end up in certain behavioral loops
  • How someone is most likely prefer follow up (email or phone call)
  • Whether someone is likely to want a number of options presented or a simple packaged solution
  • Why people are significantly different in their mid-30s onward compared to their early 20s. The other functions of your personality haven’t yet matured. Knowing their personality in their mid-20s will reveal some of the changes that you’ll likely see in them as they reach full maturity.
  • Whether an individual is focused on the past, present, or future by default
  • Whether someone is a binary thinker, or sees probabilities and possibilities
  • Whether someone is a conceptual learner, or a hands-on learner
  • Why people see “negative intent” when there is actually “positive intent”
  • How our brain traps itself in loops and how to break out of these to move forward in life.

While I present all that, it may appear that I’m presenting personalities as a magic bullet. That they are the solution to understanding everything and are totally deterministic. That you can apply them like an equation to anyone and get an exact answer, which it isn’t. However, they are a 50,000 foot map. There has been neurological mapping with brain scans confirming behavioral patterns of the brain relating to the different personality types and the order in which they process their information.

I saw a post online that said they don’t believe in MBTI because there are many personality types that defy what they articles say about their careers and such. I wholeheartedly agree, you can be anything you want to be. We all have the capacity to perform any type of work we desire. However, some work feels easier. Fits our natural rhythms better. Lowers our mental stamina less. That’s what the personality types tell us. On top of it, if I had just taken a simple test one time, it would provide almost no value. It was self-reflection, helping understand and clarify my own weaknesses and blindspots as well as continuous education at the brain, observations from thousands of interactions, and testing of different methods of presenting information to people whose personalities were discernible that led to the real insight. And that insight keeps coming.

Using this information is a practice. Something to be honed over decades. I’m only a few years in. Nowhere near an expert, but it has been useful to me in my career, my marriage, and my interactions with others when we don’t seem to be understanding each other. I would like to weave some of what I’ve learned into additional insights in the future along with the messages found in my normal blogs, but I haven’t figured out how to do that without devoting this whole blog to personalities, which there are already many sites that cover that.

For now, if you’re interested here is a primer I would say to start with:

  • 16personalities.com – Go there, read every type. Read what the letters mean. Try to type yourself and people you know and then read their strengths and weaknesses. See if it fits and if you learned anything new about them and can you relate it to interactions that you had that went differently that you expected.
  • Search out the “eight cognitive functions of the MBTI personalities”. There isn’t a great singular guide on this. Read the different functions our brains process and understand that the way our brain orders the operations of these functions is how our personalities manifest.
  • Look up socionics. This was the original more scientific model of the personality itself. It’s related, though not specific to MBTI personality types which became a more corporate philosophy and training.
  • Search for Dr. Dario Nardi. He’s done some of the neurological research on the issue. His work involves brain scans and the like.

After that, it’s a lot of coming up with your own questions as needed. Revisiting the information, and doing additional reading and research.

Difficulty doesn’t equal poor skill

I’ve been fascinated by the Dunning-Kruger effect for a while. Since it relates to people of low skill overestimating their abilities and people of high skill underestimating their abilities that leaves anyone wondering, “Where do I stand on the spectrum of skill?”

Some of the studies show that those on the low end still recognize they are less skilled than the highly skilled people in a given task, they just underestimate by how much. Alternatively, those on the high end recognize they are more skilled, they just underestimate how much more skilled they are.

An interesting study done shows that when the tasks are difficult for all the skill levels, the skilled end lowers how much better they perceive themselves to be even if they are still at the same relative level of skill difference in a task they find easy. The thought is “If it’s hard for me, I’m not that skilled.”

That’s not true at all.

There are plenty of things that are hard no matter who you are. Writing a screenplay like Hamilton will be hard for anyone. Running a Michelin-starred restaurant is demanding for anyone. Running a large public corporation would be hard for anyone. This goes hand-in-hand with perfection is the pursuit of only the simplest tasks.

When you apply yourself and things are hard, it’s best to not assume you’re unskilled or even untalented. Consider for a second, “Is this work this demanding?” If you’re making a podcast, doing high-end interior design, creating a new product, writing a book, and overall doing important work, the answer is probably “yes.” Don’t get down on yourself. Stick with it, it will get easier, but it will never be easy. That’s a good thing, it keeps competitors away.

The more you have yourself figured out, the less you need.

I haven’t always known EXACTLY what I want to do, but I’ve known it involved creativity, insight, and definitely wasn’t something common. In that regard, I’ve spent a significant amount of time in my life trying different things in order to get closer to what it is I’m both capable of and interested in.

This contrasts with someone like Jerry Seinfeld who says he always knew he wanted to be a comedian. That’s the only thing he ever wanted to do, and the only career he ever had. When you hear him talk about it in the documentary Comedian, in his book Is this Anything?, and on his show Comedians in Cars Getting Coffee, he always mentioned he just wanted to do it. He enjoyed the laughs, and it made him happy. He didn’t think of getting rich, he had no idea what he could earn with it, but he always figured as long as he could afford his rent and some peanut butter, jelly, bread and milk he would be fine. That’s truly an incredible and freeing thought.

When you know what will satisfy you, you need only the minimum. When I reflect on the people I know who dream of being rich, it’s mostly because they don’t know what they want. They want flexibility. They want to change their mind and be able to buy the item or life of their choosing.

I suffered this when I was young. Many do. Obviously, younger = less likely to know what you want so it makes sense. The closer I move in understanding myself, the more I realize I need less than I ever imagined as a kid. I see the path and it’s not hard to follow it because of money. It’s hard to follow it because it takes dedication, perseverance, creativity, insight, and connection. The overlap of all of that is small. Hitting it day in and day out is hard.

If you are in a situation where you feel you need more money. A LOT MORE MONEY. The kind where you can’t figure out a way to make it in the short-term by say getting a second job, or selling some stuff you own, then perhaps the alternative is to get specific about what you need to do what you want. This applies to careers, company projects, business launches, or any endeavor really.

The feeling you’re left with.

At the end of the of a movie, the song and feeling of the ending is the feeling and impression of the movie you are left with. It’s often why the end song plays a similar tune through the credits. If the movie ends with a feeling of wonder, the end song and credits will give that feeling too. That way those who stay back keep that feeling until they inevitably empty the theater.

If it’s a deep, complex message type movie, it may end with just silence. Leading you to contemplate what you just saw and reflect on.

When we are trying to make a point. When we are trying to encourage others. When we are trying to make a positive impact in the world, it’s important to think about the ending. This is something that I’ve struggled with in much of my work.

Presentations, blogs, articles, books, movies, documentaries, talks, or whatever form of communication you choose. The ending is the feeling you’re left with. Think about that when you choose how to end any form of communication.

Getting the closed form solutions out of the way.

When Isaac Newton was developing different formulas for orbits of planets and deriving calculus as a result, he ended up creating entirely new fields of study, and along with that created a huge number of solved problems. The scientific community during Newton’s time and immediately following for the next century or two had massive discoveries, deriving countless equations in physics. They found out how to solve problems in Electromagnetism. They solved classical beam theory. They solved fluid flow problems. The solved all kinds of differential equations like some of the problems arising from the Helmholtz equations.

Solving many different closed form problems, the ones where there is a clear answer, is the work that naturally happens as an industry starts to flourish, but it’s not the real work. The real work lies beyond the closed form solutions. The problems where the constraints impact the work more than the problem formulation itself. This is where marketing lives. This is where architecture lives. This is where product design lives. This is where customer service lives. This is where sales lives. This is where construction lives. This is where humanitarianism lives. This is where politics lives. This is where endless work and effort awaits in working towards a better future.

The closed form solutions always come early on. They may tell us how to make a simple beam with the smallest possible cross-section. It won’t tell us how to make the most economical possible building system when usefulness of the space or feeling often supersedes that anyway (to the delight of architects and the chagrin of structural engineers).

Your job isn’t to find the closed form solutions of the world, that’s a happy side effect. Instead, it’s to pick an area of the world where you can immerse yourself, learning the tradeoffs and to “see” the compromises. The work is to become someone who can lead others in this area of your expertise. There is a huge amount of work to be done on open-ended problems, everyone is looking for people who operate there.

Coffee is the world’s cheapest drug.

I saw someone mention this online. Maybe it’s not true but it’s certainly close. Coffee and caffeine change our behavior, maybe not as much as other illegal substances, but still enough on those days we’re feeling sluggish.

This is a thought about perspective. People aren’t paying for coffee as food. They were paying for it as a “mood”. After Starbucks became a cultural icon, their patrons were paying for it as a “status”. The service, offering or product is just part of the idea of what people are buying.

What you have offers something beyond the item itself. Make sure you know what that is.

Do I need credentials?

Recently I was discussing the future with someone who felt lost. They wanted to do a degree in Psychology, but were unsure about the commitment of time and money. They were already past the “normal” college age.

My recommendation was to start and run a support group. All it takes is some basic flyers, a rented room, or a virtual meeting, and human empathy. It doesn’t take years of schooling and tens of thousands of dollars for a credential you may not get use out of.

Most people are seeking credentials thinking they need it to do the work. In reality, it can be a fallacy for everyone except a few specific careers like Doctors, Lawyers, and some Engineers. The work of getting our credentials may make us better at what we do. Ensure that we’ve learned what’s come before us and don’t need to reinvent a wheel that’s been under inspection and development for centuries.

However, the credentials, if you let them, can be an excuse, on that holds you back from ever doing the work that you’re capable of. If let that excuse work, you’ll never get the experience needed to do your best. Don’t get trapped in that fallacy, it’s a terrible place to be.

Diluting “Prestige”

I’m not a member of Mensa, the high IQ society, but I must fit a profile of their members. I get messages encouraging me to take the test to join. I’m not into “Prestige” personally. I don’t particularly care about status other than I do enjoy when someone is willing to listen to advice I have, outside of that I’m not too worried about much else.

But that’s just me.

The sorts of people who join clubs like Mensa generally ARE CONCERNED about “Prestige” and “Status”. To me, that makes the message in the screenshot below a brand dilution. “Joining Mensa is now easier than ever…” Where is the “prestige” in that? Does that mean lowering the bar and the status associated with a high one?

This is how you end up with a club full of associators. I’m not part of Mensa, nor planning to be, but I don’t think this is the right move for them. Though growth is a struggle that many organizations face. Staying true to their goals means not serving the masses, but inevitably to grow beyond a certain point the masses have to be marketed to, which means the restrictions have to be loosened, which means the original purpose is diluted on and on, until even the masses don’t care because no one remembers the original purpose. At that point, your organization is dead.

One alternative would be to seek to not increase membership, but “Prestige”. To constantly tighten the restrictions, increase the annual dues disproportionately higher, and generate more money that way providing ever more value to those who want to contribute.

Probabilities-based decision making.

There are two kinds of thinking in the world: Binary and non-binary.

I’ve met many people who think in black and white, either something will happen, or it will never happen. Either something is unfalteringly true, or earth shatteringly false.

I don’t think this way at all.

Nearly every thought that I have is a probability of some sort. It’s not as if I directly calculate the probablities, but I weigh them out, look at the weight of the downsides of being wrong to each, then calculate what I should do next in a quick amount of time. I “feel” the probabilities of each as a result, my family can attest, I’m good at games like “Liar’s Dice.”

If you’re in the business of convincing people, it may be worth taking some time to uncover just how the person you are trying to convince thinks. If they are of the black and white variety, you won’t be able to change their minds over just about anything that they’ve already decided in the past. So you’ll need to make the conversation about something they have never decided about.

If the audience is of the probability variety, giving them the data and ideas that change the weightings of their probabilities around is what you’re looking for.

There is always room to better understand others. This is just one thought on that.

Linear systems vs. Non-linear systems

People understand linear systems well. If paid $12.50/hr for 20 hours of work yields $500, then 40 hours yields $1000. This is a linear system, it’s easy to understand.

What about non-linear systems?

Well, these are the things that we debate about every day. Pay, inequality, competition, the universe, etc. These things have so many interrelated variables, that it’s nearly impossible to understand the system at play. As a result, people pick sides, tell a story, and assume they are correct.

What can be done about this?

First, don’t assume other person has bad intent. Good intent must always be assumed, no one comes to an agreement with someone thinking bad of them. Beyond that, the life experiences and information that led to your conclusions, wasn’t necessarily the same as the ones leading to the other person’s conclusions.

Second, don’t make the other person have to swim for hours in information. If the sum of their life has led them to different conclusions than you, do you truly believe that it will take less than years of new information to change their opinion? Sending them article after article and video after video, and expecting them to spend all their free time trying to change their own opinion is folly. They have a life to go on with, you changing them isn’t on their agenda.

We’re swimming in non-linear systems in our world, so it’s best to realize it.

“Skill” and “Talent”

I like this piece of art. The poster said that it took them about 10 days to make it working a few hours a day. While I have no doubt the person making this has skill and talent, with a little extra time someone could make a template from a picture of an elephant and some filters in photoshop and then use that to cut this out.

At an estimated 30 hours of time, I don’t know many people who would have that kind of patience, dedication and perseverance to cutting this all out.

It’s easy to get caught up in “skill” and “talent” when it’s much more likely it’s perseverance and dedication that are missing.

P.S. Plenty of people who saw this at an art show would say, “You’re so talented. I really like this! How much?” And then balk if the artist tried to charge $750 for a reasonable hourly rate of $25/hr. It’s likely those are the same people who think this is a work of skill alone, rather than perseverance and you’re trying to take advantage. If you’re an artist, your job is to find those who don’t think that way. Don’t worry, just keep persevering to find the right customers too.

Disney stopped 2D animation based on a faulty assumption.

When Pixar was new and getting popular off of its early films like Toy Story, Disney was losing it’s audience. They were making a series of animated films with each on doing worse than the last. They had passed their prime.

What was their conclusion?

People want 3D animated movies using computers, rather than 2D animations. The technology was the problem according to Disney. They later brought in Ed Catmull, the President of Pixar, to consult on how to do that. It was quickly discovered that they had lost their ability to tell compelling stories. That corporate processes of producing a movie had triumphed over creative processes. In looking for a scapegoat for that, they turned to the medium.

In every industry, there is something fundamental. Something that must stay consistent while nearly everything around it can be allowed to change. In a restaurant for example, it might not even be the food itself. That along with the decor, the staff attire, all of it can change, what can’t change is the high standards, cleanliness, and excellent service.

Disney forgot that a great story is the fundamental assumption of their business. If you fix a problem, and don’t see a leap forward in your work, it’s likely you weren’t fixing a fundamental, you were simply working on something you perceived to be wrong.

Skill and possibility.

My family eats avocados all the time. My daughter eats a few per week, they are one of her favorites. That’s a lot of avocado pits, yet we never carved them into anything like these.

Why didn’t we? After all, these items then sell for $15 or so, when avocados fluctuate between $1-$2.

Well, first we never thought about it. We didn’t see the possibility that lied before us. Second, we don’t have the tools or the skill right now. We also have our time already filled up by quite a few endeavors.

The point is if we weren’t so distracted with our other opportunities that we wanted to work on, if we slowed down and took a look it’s possible we’d see a number of opportunities around us even as simple as this idea that probably just requires a little Dremel tool.

Your home, your job, your life, it’s all filled with opportunities if you just look for it. Those opportunities may even come from something as simple as an avocado pit.

P.S. Maybe in our case since we don’t have the time to do these carvings, we could gather our pits and sell them for cheap to an artist who does this work. Then we both win, and that’s another opportunity too.

Presenting a concept to someone who can’t see a concept.

There are plenty of people in the world who can’t conceptualize. They don’t see things in their “mind’s eye” as clearly as others. These people are going to struggle without stories and strong visual connections to them like photographs and videos. Abstract topics like macroeconomics will be a huge struggle that requires conceptualizing how the world’s transactions are into connected at a high-level. By nature, it’s hard to take a real-life picture of that.

When you’re trying to explain, it’s your job to figure out whether the person listening is capable of conceptualizing what you’re explaining, or not. If they aren’t, you may need to prep some materials to show them what you mean.

Judging the way other’s minds work by how yours does is a huge mistake. The voice, imagery, logic, and feeling of each individual is unique. Treat it that way.

When astronauts make it to mars, it will have a higher average IQ than Earth.

This was a thought I heard on social media. While I pondered it for a second, this fits with my thoughts on contribution vs. association. And this one. And that one.

The early people who show up somewhere tend to be smarter in that field. Mostly because they must be the ones most interested in the topic to tread where no one else has. Of course, for a little while other smart people may start taking notice, but eventually as the size grows, things will trend towards the average.

At times it’s worth reassessing where you are “working” in the world and if it’s time to move from an associator in one type of problem, to a contributor in the other. Both will feel entirely different and will change the way you think and behave.

Can you figure out whether you’re an associator or a contributor right now? If not, it’s a good exercise.

The soft skills of your job.

This doctor’s job is to make sure the baby gets the injection. It’s not to sing and dance and make him happy. He’s so small and weak they could just pin him down, poke him with the needle let him cry and move on to the next one. Nice and efficient.

Of course, efficient isn’t the point of everything. Neither is just doing your job. We’re here to help people. That’s what an economy is, people helping others. Why not make their day just a bit better than it was going to be. As a parent, I certainly appreciate him preventing the baby from screaming it’s head off in my ear for the next 10 minutes if this would have been done the forceful way.

We all have an opportunity to exceed expectations everyday.

P.S. If you’re someone who gets stuck on the idea of efficiency in everything you do (and there are people who do), don’t think of efficiency for the doctor here, think of efficiency for the parents. They no longer have to spend five minutes calming down a child who is overreacting.

A megaphone and authority.

To me, a megaphone sounds like authority. Most people may agree with that, when someone starts speaking through a megaphone, you tend to pay attention. I’ve thought about that for a while, why does the megaphone project that feel?

One thought was they are commonly used by police and large crowd situations to get messages across about where to go and what to do. So, as a result it became associated with authority. However, unruly mobs and protestors without authority use them too at times, and it still has an authoritative sound to it to me, even if I don’t believe in what I’m hearing.

So to me, I believe it’s the sound and the tempo that can be achieved with it that isn’t possible otherwise. We’ve all been yelled at some point in our life. We know loud noises sound more powerful than quiet ones, but there are some physical limits to the human body, namely lung capacity. To make a louder noise, you must expel more air, which with a fixed lung capacities means naturally the words have to be sped up before the lungs run out of air to say the final words. So it comes out loud and in a faster than normal tempo. It’s not possible to speak loudly and slowly without considerably gasping for breath.

A megaphone flips that. You can talk in a calm, meter tone which also projects authority, but then the technology amplifies the volume for you adding authority.

Like the megaphone, there are ways to get more people to listen to you more closely in order to make the case that you want to be heard. You need to keep a look out though, and pay attention to see them.

Demand side vs. supply side economics

Something I’ve spent much time thinking about is which types of businesses to run and make money. I did a taco business, and in my job I’m in software, I grew up in a family manufacturing business, and with my wife run an interior design business. I’ve had some other ventures along the way too.

One thing when people are starting a business is, “Will this work?” Most of the time, what that actually means is “Will I be able to get customers?” The level of difficulty in generating at least a single interacting is different depending on which industry you are in. Namely, whether demand is generated naturally, or whether you have to create the demand.

I chose those four specific business experiences to illustrate this point. In order from least effort to get customer interactions to most would be taco business, manufacturing, software, and then interior design. That’s because our bodies create the demand for food. Someone is hungry and you have good smelling tacos cooking, they are likely to stop and try them and as long as you’re good, they’ll be back. Manufacturing is necessary for anyone trying to get something made, they just need to find a supplier. Software starts to get into the “we could do without, but how much more efficient would it be” range of things, though varies a bit by software types. No one needs interior design generally, but they want it due to something aspirational. So they have to be shown things they like.

I would call the taco business and manufacturing demand-side businesses. The demand is generated from the customer themselves seeking to find the good or service they need at a price they find fair. As a result, while it’s easier to engage with customers who are seeking you out, many people like that certain and the industries here become more competitive, meaning profit margins shrink. Restaurants are notoriously low margin businesses.

Another example of demand-side business would be a grocery store. If the only grocery store in a town closed, there would be a new one open pretty quick to fill the demand. The town isn’t going to let itself starve after all.

Software and Interior design are examples of what I call supply-side businesses. Someone with an idea to improve things for others, but can be skipped if needed. These businesses have to sell. They have to make their case on why you need them. These are the businesses that many people are scared to start because it’s impossible to be sure if you’ll be able to get any clients at all. Most likely they aren’t going to just walk in like they do for restaurants. Many times if one of these supply-side businesses closes, unlike the grocery store example, it’s place won’t be filled immediately. It’s impact won’t be felt. However, these businesses are the ones where high profit margins can be charged. They aren’t as competitive since they fill wants not needs.

The reason I’m identifying this to you is because there is a tendency for people to not see this connection. To think their restaurant can charge incredibly high margins and make it. Or to think their service business can scrape by on low margins and make it. Neither is true because of competition for the restaurant and because when times get tight financially the supply side business is going to see a big pullback, meaning you need to have made good money on those jobs you did get to float through the lean times.

It’s worth reflecting on the business you’re in and whether you taking the right economic approach for your business type.

How to compete less often

I’ve haven’t seen many pool builders do something like this. If you had the ability to do one-of-a-kind unique pools like this you are significantly differentiated from someone who is just asking the dimensions, shape and decking style you want. There is no real way to compare your quote with the others who won’t or can’t do it.

Artistry is always a way to stand out. If it’s clear where to hire someone to do a task, your competitors will do it as soon as they figure out they are losing significant business because of it. With something like this, it’s not immediately clear who has skills for something like this.

Why is analysis so exciting?

When addressing a problem or starting a business, it’s easy to get excited about analyzing the situation thinking through what’s likely to happen and drawing some conclusions. It’s easy to believe that’s the answer. There is no debate about it.

The types that like analysis tend to be concerned with efficiency. When analyzing a situation to come up with a better method, design, or strategy, it’s usually measurable in the short-term. That’s efficient. It follows the motivation for doing it.

If you make something that is better in an intangible way it’s not quickly identifiable how the impact will happen. It’s not efficient. That’s not fun.

This is the difference between installing a second sink for workers to wash their hands at a coffee shop to save minutes of wait time for the same sink everyday vs. paying more for your workers so you get better help that make your customers happy. One is easy and quick to measure, the other isn’t. It’s also easier to get excited about one than the other, and it’s likely that one actually has much better return than the other. I’ll leave you to determine which is which for your case.

Why “C students” run the world.

“The ‘C’ students run the world.”

Harry Truman

It’s easy to understand why students that get bad grades don’t run the world. They often are at disadvantages in some way, or they lack commitment or they have other issues in their lives.

It’s not so easy to understand why the best students seem to run the world less often then the average students do. I’d like to take a stab at it though.

First, students that get perfect grades become used to NOT failing. It’s comfortable to do things perfectly, to be praised and to know exactly what you are doing. Ask any business owner, writer, or creative if they knew EXACTLY what they were doing along the way, the answer will almost always be a resounding, “No.” The ones that say they did are most likely forgetting the time period where they failed along the way learning how to do what needs to be done. In short, perfection is the pursuit of only the simplest tasks. After all, how do you manage your lifetime finances perfectly? How do you build the Tesla Automotive Company perfectly? How do you represent a constituency perfectly? There’s not a possible measurement to say it can be done at all. However, school teaches students that tasks should be measured. Which often means working on simpler problems where that’s possible. This is what jobs are. The best jobs end up with the best students, and they get paid well, so it’s not worth the risk to start something of their own as much.

Second, there are people with great aptitude that get average grades because they lack the patience for academia or even teach themselves. I’ve done significant studying on personality types and if you don’t fall into the sentinels group, which is about half the population, then school in its traditional format likely isn’t for you. That means that likely people that understand the subjects may not apply themselves to do their homework. Or they may not care to learn it at all if they don’t see how it relates to them, even though they have the potential to ace it if they tried. There are so many issues with the topics in standard curriculums, learning primarily through lectures, managing energy levels of students appropriately, and a whole host of other issues.

The explorer group are restless. They need to be in the moment, working things out for themselves. Building things. Auto shop. All that sort of stuff.

The diplomat group are in their heads. They are daydreamers, while they might be in class, likely they are imagining something else and tuning out what’s happening in the lecture.

The analyst group can get trapped by wanting to find the most efficient or the best. So they never get started.

These are all generalities of course, and individuals still have their own identities, aspirations and can break the common pitfalls of the groups they fall into.

If you’re smart and capable and feeling frustrated that others get to tell you what to do much of the time, it’s possible you need to start taking some risks, trying the things that just might fail because without that, you’re going to be in for a long slog. Failure isn’t something to be ashamed of.

P.S. There is also the statistics that the majority of students are average and thus a bigger population has more chances to breakout that the smaller population of great students. However, these anecdotes are still things that I have observed with people around myself.

Looking both ways at the train tracks.

I cautiously look both ways when crossing train tracks in case the arms are broken and the system is failing to warn me. I don’t think I’m alone in this.

Always trusting the systems to work isn’t in your best interest. They are there to protect you from yourself, on a day where you are tired or less alert than normal. If the system “thinks” something is happening or not, it doesn’t mean that it’s correct. It’s a real possibility the system has failed and no one has yet noticed anything out of place. For the train tracks, especially ones that carry passenger trains, it’s likely someone will notice this extremely quickly. Likely the same day.

For systems that predict fires, it may be years if no fires or smoke-filled events occur.

For economic systems where all data is “murky” it may be decades to notice systemic issues.

Everyone believing that the system is working, doesn’t mean that it is. It’s always good to check that they are. Here are some systems to think about:

  • Systems for organization
  • Systems for training yourself or others
  • Systems for making sure tasks are carried out
  • Systems for warning when problems arise
  • Systems for decision-making within a group
  • Systems for alerting people
  • Systems for creating new systems (yes, this can be overlooked too).

Think about these and how they affect your lives. It’s worth a review.

P.S. Based on our technological trajectory, our future is going to be filled with more systems and less people to man them. Taking responsibility for the successes (more like the lack of failure) of these systems is going to be a valued skillset. Think about the systems you like to manage and how you can bring a little of the future to that today.

What a messed up cinnamon roll teaches you.

It can teach many lessons especially if you didn’t start from a recipe.

What effects does the flour have? How much water to flour? Do I even want water, or should I use milk? How much fat should be added to the dough, and should it be butter, lard or something else? Do I want to use white sugar, brown sugar, maple syrup, molasses or a mixture? How much salt? Cream cheese frosting, or vanilla icing? Should I use a tiny bit of yeast and let rise for longer, or more yeast and less rise time? Can I shape them uniquely? Can I cook them uniquely? Can I serve them uniquely?

If you went through these questions and came up with some different possibilities such as:

  • Liquid to flour ratio – 3 options
  • Milk or water – 2 options
  • Butter or lard – 2 options
  • More fat, or less fat – 2 options
  • White Sugar, Brown Sugar, Maple Syrup – 3 options
  • More salt, or less salt – 2 options
  • Cream cheese frosting or vanilla icing – 2 options
  • More yeast, or less yeast – 2 options
  • More rise time, or less rise time – 2 options

Those choices are more binary than the actual amount of choices you can make and yet they still represent 1,152 different ways to make a cinnamon roll. There is a huge amount of room for judgment, experience and artistry. These are the tasks where there is opportunity for humans to come in and say “This is how I do it.” rather than a machine to do something that is simply a task to be carried out.

A messed up cinnamon roll teaches you that there is more ways to do things, and more experiments to try. You tried one and it simply didn’t work. I’m sure one of the other 1,151 offers something spectacular, but I don’t think you’ll have to bake them all to get to that point, after a handful, you’ll start to see trends that lead you towards your “ideal” cinnamon roll.

The next level of complexity

From what I’ve seen a photo can be taken and then software can crop them in the most appropriate manner to add the most visual interest. I see this in the photo collages on the “Photos” application on Macs. Most of the pictures are cropped to look the best. Since you can read books on composition theory for photography, there are obviously some rules and guidelines to follow, which means those can be done programmatically.

That means framing a picture is no longer the issue. Add in the capacity to hold more photographs than you can possibly take in a day with no need to carry physical film and the artistry of photography is no longer composition. The artistry of photography is still subject matter, timing (waiting for the right lighting for example), adjusting colors, and composing an album to be greater than the individual photos, where there is much less ability of software.

Software will continue to push us further into the areas where there are less rules. It’s the Wild West all over again, except instead of law breakers and violence, we have artistry and innovation. Your work needs to be the next level of complexity to matter.