Andrew C

A new lens on the modern business environment

Revisado: 07-30-19

Many ways of thinking in the 20th century of content/informational scarcity are no longer applicable in the 21st century of respective abundance.

Chris Anderson provides a magnificent explanation of why and how to use it to your advantage.

Some of the gems I got from it are:
- New abundance leads to scarcity elsewhere; content abundance in the 21st century has led to a scarcity of attention
- Given marginal cost converges to 0 when there is abundance (Internet content), so follows price as per Bertrand equilibria. So you may as well be ahead of the curve and round your price down to zero. Anderson uses the metaphor of gravity to explain this phenomena. Piracy occurs when a company tries to push against this force of "gravity" in their pricing.
- There are monetary markets as well as non-monetary markets of attention & reputation. Given attention & reputation are the main currencies of the Internet, today's business environment requires creativity in how those non-monetary currencies are converted into $s. Given piracy can increase attention for a product, there is an argument that it could help the company being pirated; such as musicians by increasing their concert sales greater than the loss in CDs.
- Charging a price and making profit in today's economy often requires identifying scarcity, where marginal cost doesn't converge to 0 at such a fast rate, and making profit here. People tend to have a good intuition of the marginal cost of products, and have a hard time paying for things when they have none.
- Effectively combining the two worlds of 0 marginal cost and >0 marginal cost requires leveraging the power of compliments; increasing free 0 marginal cost offerings to spur sales on >=0 marginal cost items. Google is the most familiar user of this strategy, which can be called Google Max.
- There are several archetypes of strategies to combine the two worlds: freemium (4 types: time bound, feature bound, number of users bound, company type bound), product cross-subsidization, multi-sided markets & side subsidization, non-monetary markets.

Other good follow-up leads are Catalyst Code & Platform Revolution

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Left me craving for more systems literature

Revisado: 05-12-19

I've been thinking about feedback loops for years but never realized there was a field of study that covered the topic.

Given the immense impact of feedback loops in all facets of (my) life, its certainly something worth studying more in depth. While the book goes much further, learning the definition of a feedback loop was even valuable: in a system that involves a stock, >= 1 inflow, and >= 1 outflow, a feedback loop occurs when there is a relationship between the level of a stock and the level of a flow. This is in essence another way to describe exponential growth.

This book discusses different system archetypes, of which on the highest level are reinforcing feedback loops (where more stock results in more inflow or less outflow), and balancing feedback loops (where more stock results in less inflow or more outflow). Without intervening to slow their growth, or through the counter via balancing feedback loops, reinforcing feedback loops will destroy themselves. Slowing growth in reinforcing loops is a leverage point can be fruitful for enhancing the sustainability of almost any system - the ecosystem, the economy, our bodies - and is more effective than the addition of balancing feedback loops. Other key leverage points, or viable intervention points in systems are setting up system rules/laws/incentives, reducing information asymmetry ("Thou shalt not distort, delay, or sequester information"), defining a system's purpose, and understanding the paradigms that led to a purpose. Instead, many people in charge of system decisions spend their time on low-level parameter tweaking such as how much political is energy spent on increasing the minimum wage; not only are these changes unlikely to have a significant impact on system performance, given the counter-intuitiveness of systems people often push these levers in the wrong direction.

Donella applies systems thinking to a host of systems common in daily life; I will now think if these in a much different, fuller way going forward. I'm excited to continue my study of this lens on the world.

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esto le resultó útil a 20 personas

Daily inspirations during a commute

Revisado: 04-20-19

This is a perfect book to read in the car on the way to work in the morning. The letters are short, and the ideas are stimulating to positive introspection. I find the letters a helpful reminder not to get too sucked into the incentive systems of society, and that achievement, pleasure, and status won't bring sustainable fulfillment - joy. Its as close as you can get to packaging meditation into a book.

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The first practical innovation book

Revisado: 04-18-19

The book that moved the academic innovation conversation from theory to practice. I admit I loved Clay Christensen's work on "disruptive innovation" as it was the best that was out there before, but this book absolutely crushes previous analysis of innovation.

I love the understanding of problems across domains, particularly phase transitions - water shifts from ice to liquid at a threshold of 0 degrees, similarly companies shift from fostering loonshots to politicking at an organizational size of roughly 150. However, there are levers or "control parameters" that can be used to change when phases transition, similarly to how we put salt on ice which reduces the temperature required for it to melt. Safi proposes a beautiful and actionable formula that captures these control parameters for organizations.

I love the definition of management which is so true: management is about facilitating the harmony between the creatives (one's involved in loonshots) and the soldiers (one's involved in franchise projects) which he calls being a gardener, versus being the individual that chooses which loonshots should be pursued or not (he identifies as the Moses trap). Safi also proposes a useful dichotomy of innovations, p-type which are technologically related, and s-type which are strategy and business model related. While both should be garnered, companies can develop a tendancy to only focus on p-types which have resulted in their demise. Finally, there are fantastic cases to explain all this including Pan Am airways, Bell labs, world war 2, steve jobs and Pixar, and many more.

Don't miss out on this one and refer it to a friend.

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esto le resultó útil a 16 personas

Best book out there on platforms

Revisado: 04-18-19

I highly recommend anyone in business to read this one. There are many useful semantics that I have continued to use, most prominently pipelines and how they can be inverted to become platforms. This book answers the questions of: What is a platform and the driving economics? What are the archetypes of platforms out there? What are the components of a platform that help it add value to users? What are the key metrics? What has caused failure/success for platforms? It also provides many interesting case studies that stick with you and improve your business intuition.

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esto le resultó útil a 1 persona

Great work in 1966, mediocre in 2019

Revisado: 03-28-19

Still thought it was a useful read, and appreciated it more as the book continued.

My thoughts on Peter's main points:
Focus on developing your strengths, not your weaknesses - I think a better rule of thumb is to focus on what you are passionate about, as even if it isn't a current strength of yours, if you are dedicated it likely will be in the future.
Focus on opportunities vs. problems - I don't always agree with this. Sometimes problems can be quick to solve, so you should prioritize and solve them quick first and move back to opportunities, otherwise there can be enormous consequences.
Focus on contributing to your organization - I strongly agree with this point, and this is a driving force for me at my own work.
Manage and track your time, an executive's most valuable scarce resource - I appreciated the advice of creating a log of where your time goes on a regular basis, or getting a secretary to do so, this is something I will definitely consider.
Tailor efforts to personalities of those around you, and be clear on your needs - Are you a listener or reader, do you learn visually or kinesthetically, are you most productive in the morning or night, are all critical questions to learn about and share with bosses/colleagues to make the most out of your team.

Given Peter's work was so influential to Generation X managers, reading this book can provide perspective of how your managers think, particularly if your a millennial. I can now have discussions with my boss leveraging some of PD's frameworks which I know my boss has read and values, and this can be a valuable tool.

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Get your Porter from a direct source

Revisado: 02-04-19

I admit that my previous understanding of Porter's work was based off indirect sources, mostly professors and colleagues. However, the filtering and processing of information can really have an impact on what Porter tries to get across.

I wish I had read this book earlier, it would have given me an upper edge at business school in having the ability to challenge a professor's use of Porter when it lacked rigor, and to more effectively apply the frameworks to business cases.

That being said, this book is helping me now to more effectively size up my organization's strategy, management's ability to craft and hone it, and has made me curious about ways to improve positioning. Some of the most applicable insights I found were in his definition of a company's value proposition, learning the 5 tests of effective strategy - value proposition, tailored value chain, trade offs, fit, and continuity, the theory that you should outsource generic activities vs. one's that can be tailored to your value chain, shifting from core competence to the view of an organization as an entangled web of activities that fit together to drive value, learning successful cases like Ikea who created a 'web' by for example combining flat-packs and large retail locations with ample parking (putting these two together create a whole that is greater than the sum of parts), separation of industry and company performance, using the 5 forces to translate all the complexities out there into implications of market structure and attractiveness, and the three dimensions to assess strategy: cost, differentiation, and focus.

In addition to it'ss insights, I love and resonate with the message behind the message that fills Porter's work: create positive sum value, have a long term focus, focus on ROIC only, be different not the best, make sure you define something diligently before you use it, don't try to please everyone, and live with a strong direction, sticking to and deepening it over time

I hope to read more of Porter's work soon, and that more of his great work will show up on audible.

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May have some gold, but too much digging for me

Revisado: 01-19-19

A few things that bothered me:
Trying to overfit lessons/meaning from bible passages.
Thinking we are smart enough to theorize and explain all phenomena, like why humans fail to take medications but do so consistently for pets, vs. just surfacing that a phenomena does occur.
A tendency, common for medical practitioners to have a bias for intervention, and failing to bring up the concept of iatrogenics: that sometimes our naive attempt to intervene can hurt us.
The good vs. evil conversation. Semantics akin to 'evil' have been used to encapsulate that which we cannot understand, and should be discarded as they are antithetical to empathy and rational thought.

If you looking for some advice from a smart, respectable guy, read on. But advice is ubiquitous in the world we live in and has no bounds, I prefer empirical evidence.

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*Robert Greene's Laws of Human Nature

Revisado: 01-05-19

I always try to give a book a chance before judging its quality. I read the first four laws, and I do not believe there is enough value per word in this book for me to continue. I think the most value comes from the interesting stories he gathers and communicates, rather than his analysis, and will consider going through the book and cherry-picking the stories.

This book is not about laws, its about opinions, and opinions that have not been subject to significant scrutiny. I am careful to reach such books as I need to be sure to carefully curate the words. Based off my processing, Green's maxim is to master the art of wearing masks, and decoding masks of others to determine their character. I am viscerally bothered by this belief due to its inconsistency, and its creation of a zero sum game or 'prisoner's dilemma' in society. The more people to act on his maxim, the more convoluted masks people will wear in society, and the more 'computational effort' it will take to decode them. Greene's analysis fails to account for the emotional burden that results from wearing such a mask in your life. He also fails to fully address teleology/purpose of actions, and focuses on the means to getting somewhere, but it is notable that their hasn't been significant scrutiny of what that something is. The first law of rationality did provide some light to this, in becoming emancipated from emotions, and fostering our abilities to live in alignment with the logic in the world around us. However, I found a level of scatter from chapter to chapter.

I was skeptical before reading this book because of Greene's proclaimed ability to be the expert on power, war, and now human nature. While I have not read his book on power, I make up that he may be an expert on power that is in a laws of nature costume. Additionally, I am also skeptical when people require 48 laws or such to explain something. This flags me that over-fitting may be occurring, in simply communicating collectively exhaustive research on the subject, versus a scrutiny and filtering and sorting the data for the reader to prevent noise. I also have a fascination in why the previous reviews of this book appear to be so positive. I make up that a selection bias may occur in the first couple of months after a book's release, in that many of his promoters that have read his laws of power are rushing to read his new material, but they have already been selected to align with the beliefs of his writing.

Instead, read a true expert on the laws of behavior in an incredible book called 'Behave' by Robert Sapolsky.

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esto le resultó útil a 10 personas

Likely the most thought provoking book I've read

Revisado: 01-03-19

Contrary to others, I do think Nassim is as smart as he thinks he is. It took me a couple of chapters to shift from initially thinking he was an inconsistent, bashful, narcissist, to appreciating his honesty, independent mind, consistency in beliefs, pro social nature, and praise of others he respects. I was extremely close to stopping reading but am very glad I didn't.

Its amazing that he's able to present his theories in various mediums - logic, mathematics, narratives, semantics, metaphors - which really allows you to fully grasp his ideas and realize they are robust from all angles. I experienced many 'aha' moments listening to him, as there is something that just feels intuitively right about his concepts, in contrast to opinions of other authors which I find can be a crap shoot and has not been subject to as much deep scrutiny.

I love how fragility can be determined by looking at the symmetry of a histogram, or by looking at a graph of two variables and observing concavity, or by identifying whether options are present to benefit from uncertainty or not, or even through intuition in identifying a feeling of rigidity and a Procrustean bed. All of these things seem unconnected at first glance but they connect beautifully. Many of his ideas revolve around the idea that we think we are smarter than we are, think we can predict catastrophe, think we can understand all relationships in complex systems, think we can do better than mother nature, and we cut off the legs of nature's variability to create pseudo-certainty. This results in a fassad of robustness, but fragility to catastrophe and massive downside is the ultimate foundation. We must resort to 'via negativa', getting rid of the things we do that are in contrast to nature and don't pass scrutiny by the burden of evidence. While we can prove things don't work, we have a hard time proving adding things will work, as absence of evidence doesn't equate with evidence of absence. However, our society commonly incorrectly gives the burden of evidence to the via negativa, such as in having to prove how the overuse of fossil fuels does cause harm. We think we can do better than tinkering in innovation, while this is what mother nature does, and almost all successful pharma and therapeutics have come from trial and error and empirical findings, such as Viagra which was intended as a heart medication. We intervene in life when the benefits to intervention are low, when we have mild symptoms, and their are hidden risks to intervention called 'iatrogenics.' On the flip side, when we are in times of distress, have a serious condition, or in the event of a black swan, we don't intervene enough and don't leverage all the tools we have. We think we can find a theory for everything that empirically seems to work, but that theory changes annually, it provides no benefit in application, and we trick ourselves into thinking 'taught birds how to fly,' while humans developed the plane through trial error and not through application of a theory developed by academia. Suckers think our knowledge must be constrained to what we have a theory or semantic for, even though our language will always be much inferior to truth, and the word for blue wasn't used until the 6th century. Countries get rich through resources, and poor money into education thinking it will bring them riches. An most importantly, we are in a world where there is more noise than ever around us, as the media, academics, bankers, consultants, bureaucrats, and many influencers don't have skin in the game; if their bridge falls, it will not be on them.

This book will truly effect the way I live my life and how I make important decisions. I'd recommend also getting a hard copy as there are a host of useful visuals that can help improve your understanding of the concepts. I look forward to returning to his other works after a small break, but only when it feels right, and only his oldest books, as Nassim would say.

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