Mind Crunches #10: Thoughts, Links & Observations
Pushing pause on a rapidly changing world
On January 2, 2021, I had listed some of the “big ideas” I was planning to further explore and read a lot about this year. Almost half way through 2021, and despite the fact that 2020 was extremely transformational (you can find my 2020 review here), the world still seems to be on a fast pace of change. I am writing this while watching Elon Musk on SNL and I realize that we can now measure how good a TV show is based on the real-time price of a meme-based crypto currency that we can all trade via an app. And if you believe that this is not too crazy, it is now official that Space X will -partially- finance its moon mission on Dogecoin. We seem to be jumping between two worlds. A world of extreme interconnection where a container ship blocked in a canal can stop the global economy and a world of accelerated individualism where we build our own fragmented realities in virtual worlds and newsfeeds. So I found this was a perfect time to push pause, revisit some of the books and content I consumed the past months, put some of my thoughts in order and share some of my favorite Mind Crunches. Hope you find them interesting to read!
Innovate By Subtracting: I believe Covid revealed many management and engineering inefficiencies we couldn’t clearly see before. One of the things which is now clear (in hindsight) is that we were focusing a lot on “adding” features to solve problems rather than subtracting. We rarely revisit to accurately assess a project, an idea, a new product, a new team, an innovation. And even when we do and we conclude that X is not properly working, we tend to try to improve it by adding a new feature rather than taking out failing parts or even kill X. Supply chains, customer experiences, go-to-market strategies, business plans. These are only few of the processes where people favor adding features to optimize them. And by adding more features, they also increase the need for interconnection which we know now that is a very fragile practice. The recent gas shortages in the US and the Suez Canal blockage speak for themselves. As Taleb has written, you can’t scale without scaling risk. The latest research shows that despite the fact that most times subtracting something can solve a problem, we have a heuristic for additive problem solving. For example, it is now known that adding new highways makes traffic worse because of induced demand. So what are the things you can subtract to make your daily life easier? My post-Covid subtracting business predictions are: shorter customer journeys (less touchpoints), less meetings, agile supply chains, less office locations.
On Stagnant Political Innovation: It’s still a big mystery to me why there is so little political innovation. Why is it that we have made so much progress in technology, science, innovation but at the same time we rely on stagnant political models and ideas? What keeps us from bringing innovation and creative destruction in digital governance? Why can’t we inspire an entrepreneurial spirit to political philosophers, local governments and think tanks? The past years, we have witnessed some truly interesting experiments and frameworks but we should have much more political innovation around the world. It seems that most of the political activism energy is invested in protesting and fighting the status quo rather than envisioning a new paradigm. We found less, we keep inheriting more as Balajis writes here. The most interesting innovation comes from the areas of crypto and decentralization. As I write here, RadicalxChange is a great example of digital democracy innovation. Another encouraging progress comes from crypto states and charter cities like Prospera in Honduras or NEOM in Saudi Arabia.
Evolutionary Biology + Digital Transformation: I firmly believe that if business executives had a good knowledge of evolutionary biology and of how evolutionary processes (like natural selection or speciation) work, we would witness a much faster and more meaningful wave of digital transformation. It is funny that “transformation”, a word with a very heavy scientific background, has turned into a business buzzword but very few people truly understand how transformation occurs in real life. In my experience, if you work in the technology industry, following the latest scientific news on publications like Nature, Science Magazine or columns like the NYT Trilobites is equally important with reading the FT newsletter. When you do, you realize that you approach business terms in a much more creative way. For example, you understand that optimization, based on the idea of the survival of the fittest, is not always the best way forward. You learn that cicadas are solving fragile supply chain problems better than humans. Or you learn how autotomy, or “spinoff” in business lingo, actually works. You get to understand how important mimetic behaviors, or else “meme economy”, are for the survival of beetles or why fungi can help your team better partner with other stakeholders. In other words, we need to make “Evolutionary Biology” a required MBA course.
Make Advertising Legitimate Again: With the release of iOS 14.5, apps must now ask for and receive user permission before they can access a device's random advertising identifier, which is used to track user activity across apps and websites. Apple disables the setting by default and the latest data show that just 4% of iPhone users in the U.S. have actively chosen to opt into app tracking after updating their device to iOS 14.5. This might seem trivial but it’s a huge shift on how online advertising works from a technical point of view but most importantly on how we philosophically define advertising. From the very first days of Internet, digital advertising is associated with tracking users’ online activity and the concept of “tradeoff”. The deal is “I will bombard you with ads if you want this service for free”. It is such an irony that the branding of the advertising industry itself is so bad. There is an increasing erosion of trust between customers and advertisers but even more an erosion of legitimacy. I was thinking about this as I was reading Buterin’s post on the importance of legitimacy. It’s clear to me that online advertising is NOT legitimate any more or at least its legitimacy is coming by “brute force”. The latest iOS changes, the increasing expectations by younger consumers for truthful and non-pervasive advertising and the latest advancements in blockchain technology have built a great momentum for advertising to gain trust and legitimacy. It is time advertising becomes actually creative and innovative again. (here are some thoughts on blockchain marketing).
Serendipity & Teamwork: as companies around the world are announcing their post-Covid policies, it seems that most are choosing a “hybrid” model while some others are moving to a “cloud HQ” version renting working spaces across the world in case someone wants to work from an office but they still don’t have official HQ premises. I am still a big advocate of hybrid models and my strongest argument is that serendipity cannot be manufactured or copied online. Serendipity sounds like a theoretical word but it is a key factor for teamwork, employee morale and office productivity. The random encounters at the office space, the casual chat over coffee, the “hey, can you please help me with this” that your colleague may ask as you are having lunch are simple examples of how serendipity works and actually contributes to the success of teams and companies. By moving on a fully remote work mode, you lose serendipity and teamwork spillovers.
Building Effective Bureaucracies: Bureaucracy is a word which has been vilified in our world of fast innovation and entrepreneurship but I always found that there are some bureaucracies which are not just necessary but actually valuable for teams and organizations. It turns out that Samo Burja, an excellent political scientist, has perfectly defined my vague description into what he calls “effective bureaucracies”. The idea is that organizations which know how to unlock the value of bureaucracies can maximize value creation in the absence of expensive and difficult coordination, or individual talent that is difficult to train and evaluate. Agile management, a very famous business practice, is all about lack of central coordination but it seems that bureaucracy and agility are not competitors but collaborators.
Skin In The Game Business Models: I have turned into a huge advocate of the “skin in the game” concept, especially regarding business and innovation. Things like “money-back guarantee” or the Income Share Agreement that Lambda school pioneered work great exactly because the concept of shared accountability sits very deep in our human nature. We should push for novel “skin in the game” ideas both in business politics. Shared KPIs between SaaS companies and customers, outcome-based donations, OKRs are a good start. We need more!
Quick Mind Crunches
My thoughts on Sales & Marketing dynamics in Enterprise, retweeted by Ben Horowitz :)
Crypto closing the SME financing : Balajis explaining how crypto can accelerate India’s transformation.
The future of remote work: Chris Herd, Firstbase CEO, on the most definitive list of Remote Work trends.
Medical professionals are extremely bad at understanding probability both before and after testing!!
The Case for Ethereum Maximalism: Probably the most insightful argument online on why ETH>BTC
The Architect of Tomorrow: Ben Horowitz on life and Nas! Highly recommended.
How fashion is reinvented by blockchain and virtual social experiences.
Orbit, one of the most revolutionary tools of thought I have experienced promoting the concept of mnemonic medium, is now on GitHub.
The Friday Thing: Steve Clayton, Microsoft Chief Storyteller, sharing his thoughts on the pillars of storytelling.
Gladwell on how he conceived his new book first as an audio project and then as a written script. This is pretty interesting because it shows that we are moving into a platform/medium-based creativity.
The story of how Vimeo reinvented its business model is some serious Harvard Business School sh*t!
NYT on NFT horse racing!
The biggest startup activity in emerging markets is around fintech and neobanks which actually proves that necessity is an important factor of innovation.
I had recently written that companies will increasingly become narrative-driven due to the reality fragmentation we are experiencing. Washington Post now has a SaaS spinoff helping organizations place content and narrative at the center of their operations.
Mariana Mazzucato on how governments can become mission-oriented. Mazzucato is a very interesting thinker. Definitely worth reading her books. This is a good critique on her book “The Entrepreneurial State”.
Recommended book: The Horde: How the Mongols Changed the World. Really insightful book debunking all the myths about Mongols. It turns out Mongols were amazing on building an economic order that was mobile, organized, and innovative.
Recommended podcast: Yascha Mounk on why governments fail.
Recommended Newsletter: Hardcore Software from Steven Sinofsky
Quote of the month: “Fast gets good quicker than good gets fast”
Photo of the month: Struggle No Time for Love
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