Scott Adams explains the pivot

Scott Adams of Dilbert fame, but recent co-founder of startup CalendarTree.com explains what it means to pivot and why it matters:

So imagine if you will, some of the smartest, most rational humans the world has ever created, wallowing around in the absurdity of Silicon Valley, where success is mostly based on luck. How does one feel good about that? And what is the solution?

Answer: You institutionalize the pivot.

In other words, you move from a goal-oriented approach to a systems-oriented approach. The system involves assembling a team around a starting idea and then pivoting until something lucky happens. No one pretends to know where it will all end up.

Here's the system:

1. Form a team
2. Slap together an idea and put it on the Internet.
3. Collect data on user behavior.
4. Adjust, pivot, and try again.

Thanks to Google Analytics, Optimizely, Bitly, and other tools for measuring customer behavior in real time, a smart team can try different approaches and different products until something works out. A start-up in 2014 is a guess- testing machine.

Update: More here: Five successful tech pivots (TechCrunch)

The arbitrage opportunities a bit of marketing creates...

Well, marketing and user experience I suppose... "people will pay twice as much for an artfully composed salad" (PopSci via Instapundit).

Bridgewater Associates and the "soul of a hedgefund 'machine'"

An interesting look inside Bridgewater and its founder Ray Dalio - particularly as I've been doing a lot of research lately about systematization and processes (WSJ):

How do you build the world's largest hedge fund? Bridgewater Associates founder Ray Dalio says he did it by creating a culture of "radical truth and radical transparency." Mr. Dalio's perhaps radical belief is that "everything is a machine"—including organizations and even the individual people within them. At his firm's Westport, Conn., headquarters, we are discussing the human machines at Bridgewater and the equally fascinating machine known as the U.S. economy.

As for the people at his firm, the idea is to encourage everyone to accept unvarnished criticism as a treasured opportunity to learn and to solve problems. This is intended to allow constant refinement of business processes—also known as machines within the firm—from how Bridgewater buys office furniture to how it evaluates the world oil market.

But human machines don't always welcome complete candor. And at Bridgewater they have to get used to internal software that conducts a non-stop evaluation of their performance based on daily entries from colleagues and even rates their credibility on particular issues. This doesn't mean the software makes all decisions. When the system recently reported that the company's head receptionist was underperforming, executives decided that it was a case of the software not being calibrated to effectively measure her work.

What makes a great leader?

According to Andreessen Horowitz (Ben Horowitz via David Jaxon):

What makes people want to follow a leader? We [Andreessen Horowitz] look for 3 key traits:

The ability to articulate the vision. Can the leader articulate a vision that’s interesting, dynamic, and compelling? More importantly, can the leader do this when things fall apart? More specifically, when the company gets to a point when it does not make objective financial sense for any employee to continue working there, will the leader be able to articulate a vision that’s compelling enough that the people stay out of curiosity?

The right kind of ambition. Truly great leaders create an environment where the employees feel that the CEO cares much more about the employees than she cares about herself. In this kind of environment, an amazing thing happens: a huge number of the employees believe that it’s their company and behave accordingly.

The ability to achieve the vision. The final leg of our leadership stool is competence, pure and simple. If I buy into the vision and believe that the leader cares about me, do I think she can actually achieve the vision? Will I follow her into the jungle with no map forward or back and trust that she will get me out of there?

Clayton Christensen's response to the New Yorker

A response to an (attempted) takedown by Harvard historian Jill Lepore of the idea of "disruptive innovation" (Businessweek).

Conquering chronic procrastination

Yeah I'll admit it... this is could be quite useful: "5 weird (but effective) ways you can conquer chronic procrastination" (Time).

A reminder that innovating isn't just about the technology

It's not just Apple. Why GoPro's success isn't really about the cameras (Wired). Hint: it's about the experience.

"High taxes redistribute people, not wealth"

Observation by Fraser Nelson, in the Telegraph (via ASI)

'Organic' isn't clean or toxin free

If environmentalists really care about the environment, they might not want to promote organic food (Bloomberg):

Like all farms, those that grow organic products rely on fertilizer. Often, organic farmers use animal manure rather than chemicals derived from petroleum or minerals.

In one study of greenhouses in Israel, the use of manure led to much more nitrogen leaching into groundwater compared with use of conventional fertilization. Nitrogen contamination, the study noted, is one of the main reasons for closing drinking-water wells. And by the way, nitrogen from all sorts of farming is one of the main pollutants behind algae blooms, fish kills and dead zones in bodies of water from local farm ponds to the northern Gulf of Mexico.

A broader study of 12 different farm products in California found that in seven cases, those using conventional methods had lower greenhouse-gas emissions. A big reason for the difference? Conventional farming tends to be more efficient than organic farming, meaning fewer inputs are needed to generate the same amount of food.

That hits on a critical issue for organic farming, as noted in a 2012 analysis of more than 100 studies of farming methods across Europe: Getting the same unit production from organic farming tended to lead to "higher ammonia emissions, nitrogen leaching and nitrous oxide emissions." And while organic farming tends to use less energy, it also leads to "higher land use, eutrophication potential" -- that's the dead zones mentioned above -- "and acidification potential per product unit."

So what killed the American dream?

From the WashingtonPost: "For the first time in a very long time, Americans aren't so sure their kids will have better lives than they do." Again, if it's dead, it's because of self inflicted wounds.

IMF: Apparently UK 'austerity' worked

There has been much to study and debate over the response governments have had to the "great recession" - and there undoubtedly will continue to be. But for Keynesians, an unexpected setback in the UK's growth and recovery (even if the austerity" wasn't quite so austere according to Reason). The IMF has since acknowledged its growth forecasts in response to 'austerity' were wrong (Telegraph):

Christine Lagarde has asked whether she needs to grovel on her knees before George Osborne over the IMF’s incorrect warnings on the UK economy, as she warned against raising taxes.

“Do I have to go on my knees?” Ms Lagarde, the head of the International Monetary Fund said, when asked whether she has apologised to George Osborne over the fund’s low growth forecasts and calls to adopt a ‘Plan B’ of less austerity – calls the body now accept it got wrong.

In a blow to Ed Miliband, who has called for higher rates of personal taxation and new levies on banks, Ms Lagarde said tax rises are “not recommendable”.

The growth the UK is enjoying now has “resulted” from George Osborne’s policies, she said. The growth now appears to be “pretty sustainable” because it is being driven by private sector investment as well as households consuming more.

A year ago Oliver Blanchard, the IMF’s chief economist, warned Mr Osborne was “playing with fire” with austerity and downgraded Britain’s growth forecast to just 0.7 per cent for 2013. Instead, it grew by 1.7 per cent, and is expected to hit 2.7 per cent this year.

While I think it's laudable that Lagarde has acknowledged the error, it's really the British who are benefiting substantially from the reduced debt burden that was advocated and the stronger economic growth. I can't help but wonder how much better the global economy would be without the seemingly neverending rounds of stimulus funded by debt that will one day need to be repaid.

John Stossel: It's income mobility that matters

More on why income inequality shouldn't matter (reason.com):

It's true that today the rich are richer than ever. And the wealth gap between rich and poor has grown. Now the top 1 percent own more assets than the bottom 90 percent!

But focusing on this disparity ignores the fact that over time, the rich and poor are not the same people. Oprah Winfrey once was on welfare. Wal-Mart founder Sam Walton was a farmhand. When markets are free, poor people can move out of their income group. In America, income mobility, which matters more than income inequality, has not really diminished.

Economists at Harvard and Berkeley crunched the numbers on 40 million tax returns from 1971-2012 and discovered that mobility is pretty much what The Pew Charitable Trusts reported it was 30 years ago.

Today, 64 percent of the people born to the poorest fifth of society rise out of that quintile—11 percent rise all the way into the top quintile. Meanwhile, 8 percent of people born to the richest fifth fall all the way to the bottom fifth.

The poor got richer, too [...] over the last 30 years, incomes of rich people grew by more than 200 percent, but according to the Congressional Budget Office, poor people gained 50 percent. That growth should matter more than the disparity. Piketty's data reveal times in our history when income inequality decreased: during world wars and depression. Do we want more of that?

On inequality and the Piketty mess

For anyone who has been following the news in the last few weeks, those who favor redistribution over wealth creation have been dealt a setback with the Financial Times' review of the data Piketty used in his book "Capital in the Twenty-First Century" (Amazon). In a way his book has been a Rorschach test (Qz). While many of his supporters have been reduced to name calling (or dismissing the criticisms, HuffingtonPost) despite some fundamental problems with his claims, I'm not sure why it matters.

As Scott Adams, author of Dilbert points out (Dilbert):

If you could snap your fingers and magically double the wealth and income of every human on earth while somehow keeping inflation in check, would you do it?

Before you answer with some version of "Duh, yes." keep in mind that you would be severely worsening income inequality. And that, as we are often reminded by the media, will destroy civilization.

I'm not entirely clear why income inequality leads to doom, all other things being equal, but I hear it has something to do with the French. The analogy, as I understand it, is that Marie Antoinette and her historically inaccurate philosophy "Let them eat cake" is exactly like Bill Gates pledging his fortune to eradicating malaria, fixing education, and providing clean water to the poor.

Further, as Prof Deirdre McCloskey asks, in the context of the fact we are so much wealthier today at effectively every socioeconomic group than our ancestors, how much does inequality matter?

Forbes: Profile of Nick Woodman, billionaire founder of GoPro

The remarkable story of the founder of GoPro, including the dips before finding success (Forbes):

That’s how Woodman can now fly via G-III, versus the days he spent sleeping out in his 1971 Volkswagen bus or driving Penske trucks to set up trade show booths with accessories he would later return to Home Depot after use. Back then he was a trade show fiend, learning to sweet-talk executives and sell his passion on the floors of conference centers from San Diego to Salt Lake City. His big break: REI. Woodman spent months messaging executives and shooting over progress reports before the outdoor sports giant succumbed, giving the company (which is still technically called Woodman Labs) a huge dose of validation.

Read more here.

Marc Andreessen: 'Do what contributes - not what you love'

Apparently his tweets were controversial - but I'd agree... plus it helps to actually love doing something that contributes (BusinessInsider):

Better career advice may be "Do what contributes" -- focus on the beneficial value created for other people vs just one's own ego. People who contribute the most are often the most satisfied with what they do -- and in fields with high renumeration, make the most $. Perhaps difficult advice since requires focus on others vs oneself -- perhaps bad fit with endemic narcissism in modern culture? Requires delayed gratification -- may toil for many years to get the payoff of contributing value to the world, vs short-term happiness.

Self driving cars and the future of logistics

It's difficult to see the downside, especially if the technology is showing that it's better than human drivers (MITTechReview) - even if driving through the downtown of any major metropolitan city, it doesn't seem like a high bar to reach. But it's fascinating to follow the iterations the Google team has been making in testing its prototypes:

The idea was that the human drives onto the freeway, engages the system, [and] it takes them on the bulk of the trip—the boring part—and then they reëngage,” said Nathaniel Fairfield, a technical lead on the project, speaking at the Embedded Vision Summit in Santa Clara, California, on Thursday.

That approach had to be scrapped after tests showed that human drivers weren’t trustworthy enough to be co-pilots to Google’s software. When people began riding in one of the vehicles, they paid close attention to what the car was doing and to activity on the road around them, which meant the hand-off between person and machine was smooth. But that interest faded to indifference over weeks and months as people became too trusting of the car’s abilities. “Humans are lazy,” says Fairfield. “People go from plausible suspicion to way overconfidence.”

And so Google’s new vehicle design takes a leaf out of NASA’s design book to cope with such eventualities. “It doesn’t have a fallback to human—it has redundant systems,” said Fairfield. “It has two steering motors, and we have various ways we can bring it to a stop.”

While Wired calls it sneaky, incremental technology improvements are already making their way into mass produced cars. The developing technology also seems to seeping into other industries where we may see more immediate gains with technologies that are allowing trucks to drive in platoons reducing wind drag and increasing fuel efficiency as much as 10% for the rear truck (MITTechReview). Exciting developments to watch...