Day to day designs

MIKE

There’s a lot of advantages to designing day-to-day decisions. It’s may seem unglamorous but changes add up. For instance, try to leave your phone out of reach.

But the internet is on there!

The heart of design is to change a situation so that something is more or less easy. The beauty of design is that the change is not always in proportion to the effect. And we need designs because as Byrne Hobart notes, we have a lot of muscle memory.

“There’s a lot of muscle memory typing ctrl-t Reddit dot com. It is really important to resist that stuff because it is a continuous tax on your ability to accomplish things. This is a good reason to buy physical books or magazines. If can force yourself to focus for awhile, you can get non-linear benefits from learning a whole lot about narrow topics and understanding new topics by using analogies from previous ones.” – Byrne Hobart, World of DaaS, August 2021

Here Hobart offers a couple of useful ideas in an interesting way. One is design but he also frames Reddit as a tax. This is clever.

Tax is normally associated with money and with being bad. Tax reframed here keeps the bad part but shifts the focus to time. That works with travel budgets too.

Personal productivity is another one of the Large N small p cases. It may not seem like we are ‘doing a lot’ but small changes add up each day.

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Being better than Superman

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Maxim four from Richard Zeckhauser is: “When trying to understand a complex real-world situation, think of an everyday analogue”.

Alex Tabarrok has been using this strategy to communicate about vaccines.

“To me the vaccines are like a superpower. Superman is immune to bullets and I tell people: ‘Wouldn’t you like to be immune to bullets? The virus has killed many more people this year than bullets have, and the vaccine makes you immune to the virus, it’s better than being immune to bullets!'” – Alex Tabarrok, July 2021

In Dan Levy’s book about Richard Zeckhauser he includes a section from Gary Orren who used the everyday analogy strategy to describe the AmeriCorps service program. AmeriCorps, Orren told legislators, is like a Swiss Army knife, it does many things well though it’s never the perfect tool. A few weeks after addressing the governmental staff Orren returned to their offices. “Oh yeah, I remember you. Swiss Army knife.”

This strategy helped, Orren explained, because it focused his thinking and the audience’s understanding. A lot of times our thinking is FAST and analogies shift complex concepts into simpler situations.

Simplification isn’t the end though. Extremes, like questioning the Ohio vaccine lotto, are not the final answers but a first foothold. If we can understand an issue’s basic components first, it can be easier to build up to the rubber-meets-the-road challenges of IRL.

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My year of AmeriCorps was health based, and I remember many vision screenings .

Selling shirts, planning planes

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We’ve looked at a few different customer acquisition cost strategies : F1 racing, Zappos’s mistake, and P.S. I love you, from Hotmail.

The CAC ideal is to acquire the best customers for free. That’s ideal. L.L. Bean started when Leon Bean mailed his catalog to out-of-state hunters. Michael Dell sold newspaper subscriptions, but sourced his leads from the “Just Married” records. Both men found pretty-good customers for a pretty-good price.

Customer acquisition might be the most interesting puzzle in business because the lower the CAC the more flexible the business model. Today we’ll add two more.

About Mike Wolfe, of American Pickers:

“He would go from barn to barn and buy some cheap stuff, something sold in the store for fifty bucks. We would buy something like an old motorcycle that was art which we could sell for twenty grand. And each day all these people, from all over the country, would come into the store and we would probably sell five-thousand-dollars worth of items and probably thirty-thousand-dollars worth of t-shirts.” – Sam Parr, My First Million, August 2021

The American Pickers television show is the customer acquisition vehicle for selling merchandise. Brilliant right? Okay, the second one.

“Growing a financial services company is so brutally difficult, and the growth is so restrained by customer acquisition costs that it is literally worth it to start flying people around the country. That is the most cost effective way to sign people up for credit cards, and the credit card business is so lucrative it is actually worth it.” – Byrne Hobart, World of DaaS August 2021

The business model of airlines is to operate a hub location that allows for network effects and to maximize the capacity of each plane because each additional customer costs, per Hobart, a drop of fuel and bag of nuts. Hobart’s whole interview is wonderful.

Finding customers has evolved over time. When customers were rural, catalogs ruled the day. As customers moved to cities, it was the department store. Then customers got cars, and the mall and big box retail came to be. The most recent step then is to the internet. It’s the same question Bean bandied in 1912: where the customers for what I am selling?

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bonus: look for ‘lost’ monetization opportunities, like Matt Levine’s Money Stuff Bloomberg email.

The many games of Jeopardy

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January 14, 2020. Double Jeopardy Daily Double:
What is Chad?

Jeopardy is incredibly instructive. It has come up a number of times on the blog. The best summary is the June 2021 NPR Planet Money podcast.

First, Jeopardy is not a trivia game. Jeopardy is a television show. It’s a game within a game within a game within the game of life. Life is a game in the sense that there are rules (hard like physics, soft like psychology), consequences, and randomness.

Penn Jillette notes the gaminess. ‘Winning’ a game like Jeopardy or The Apprentice, wrote Penn, meant being interesting not being champion. His victory is selling tickets to the Penn & Teller theater show, not to make the best beans.

Like all games, the game maker can change the rules. Jeopardy is a pretty clean operation, but games like Survivor change the rules all the time. Governments change rules like “interest rates” or “bailout”. Regulators change rules too, maybe that’s their chief job?

Until 2003, Jeopardy contestants could only win five times. Then the rules changed and Ken Jennings showed up to win seventy-four games. Jennings has a very particular set of skills. Jeopardy was one of the few American shows Jennings watched growing up in South Korea and Singapore. But it wasn’t the clue collection, it was the cadence.

Jeopardy really isn’t a trivia game so much as (per the NPR episode) “a really crappy computer game.” Just as Jeopardy is a game within a game, there are three games within the game of Jeopardy too.

Before addressing the three games, it’s helpful to remind ourselves about the skill and luck spectrum. The “success equation” is to disentangle what games within games are skill based and which are luck based. Skill based games, wrote Michael Mauboussin, are games where some set of actions consistently returns some set of results. Another way to find skill based games is to ask: can you lose on purpose? Most games are a mix.

The outcome of this arrangement, says Mauboussin, is the “paradox of skill”. As each game within a game optimizes, the impact of luck grows.
Kawhi Shot

Jeopardy’s Three Games.

Jeopardy is a series of sequential games. If a contestant wins one, they get to try at the next, then the third, until the process resets. The first game is the buzzer.

Buzzer. “A crappy computer game”. There are a lot of ways to practice the buzzer, the most common among fans is the toilet paper roll holder.

During IBM’s Watson appearance some fans thought that the computer was too fast, though the engineers note the accommodations. Humans, wrote David Gondek, have the ability to anticipate when the buzzer window will open.

Like a basketball free-throw is preceded by a foul, winning the buzzer is precedes a chance to answer.

Trivia. Jeopardy screens contestants via a written test, then (a randomly selected) audition. Everyone that’s on Jeopardy is already good at trivia and getting much better is difficult. Not only that, Jeopardy as a sampling issue: it’s only full of people who really want to be there and do well.

The potential contestants (by now) know that not all trivia is important. The United States (capitals, geography) and its history (presidents) are important. Literature and Science are important. Professional wrestling and heavy metal are unimportant. Jeopardy’s trivia topics are wide but not deep, except for a few areas.

This used to be a data problem. Besides watching each night, how might a potential contestant figure out what mattered? Since 2004 there is a J-Archive, a fan curated collection of all things Jeopardy. Thanks to the internet, this part of the game within a game has shimmied from the luck end of the spectrum to the skill portion.

Though luck still matters. James Holzhauer only knew Sadie Lou was a nickname for Sarah Lawrence College because he and his wife considered ‘Sarah’ as a baby name.

Game-theory-optimal.
In the season before James Holzhauer, the top ten Daily Double bets ranged from seven to fifteen thousand dollars. Holzhauer raised that to eleven to twenty-five. Holzhauer nearly doubled the Daily Double bets.

It’s not just the betting. Daily Doubles are tactical. If a player finds one early in the round, they won’t have enough to bet to make it ‘a true Daily Double’. Bet too little of a big stack and it lets the other players ‘stay in the game’. Bet too much of a big stack too late and a lead will evaporate.

It was gambling that let Holzhauer to reframe the Daily Double. Think of a coin flip. What is the price and payout someone would play? A dollar to win a dollar is kinda boring.

Or not? At our house we play this dice game called Left, Center, Right. At the start, each player has three chips and they roll three dice, one for each chip. If the dice say left or right, a player must pass a chip left or right. Center and the player adds a chip to the pot. A player can also roll a dot and they keep that chip. It’s a fun game, especially for the younger-non-gaming-gamers. But there’s no skill. The “successes equation” of LCR is: have fun.

The bet a dollar to win a dollar coin toss is meh. What about bet a dollar to win two? That is interesting. That’s how Holzhauer saw Daily Doubles. It cost a dollar to win a dollar but rather than the payout being skewed the odds were.

Jeopardy seems simple. It’s fun to feel smart, that’s part of the big game too, and play along at home. Like poker’s appeal maybe there’s more to it. What is, a richness of thinking?

Timestamps in the episode:
A jarring style, First 20 years, Trivia’s paradox of skill, Finding Daily Doubles, J-Archives, Betting Daily Doubles.

Unlocking the restricted actions section

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There are (at least) four ways actions are restricted: macro-culture like society, micro-culture like an office, job mandates, and personal psychology. For Andrew Sullivan, the obstacle was the last one, the self.

“What I find that marijuana does, and to some extent — mushrooms definitely do, meditation does as well — is that they suppress the ego. They weaken the ego.” – Andrew Sullivan to Tyler Cowen, August 2021

Psychedelics, for Sullivan, offer a change in perspective., “You’re less attached to your own pride. Your mind is taken out of its normal rut,” he explained.

How much THC is TBD, but Sullivan’s point is healthy. Ego, for instance, is part of the reason Jason Blum is successful making horror movies. Ego, is part of the reason, Bank of America succeeded. The proletariat, it turns out, is profitable. “I don’t care where an idea comes from,” said Gregg Popovich, “You have to be comfortable enough in your own skin to realize that an idea can come from anywhere.”

A healthy amount of ego helped make Friends. An unhealthy ego meanwhile leads to dentists opening restaurants or financiers on movie sets.

This is one of those that-kinda-makes-sense ideas but a regular dose certainly helps.

Hurdling past covid

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One way to think about “adoption” is as series of hurdles. If something is “adopted” it has succeeded by crossing the set of hurdles. There are few food bacteria “adoptions” because of hurdle technology: hot, cold, salt, and acid all make the process harder for food bacteria to survive.

Another metaphor for this approach is Swiss cheese: one layer has multiple holes but if the layers are independent, then stacking one on top of another removes the holes.

Part of the problem with studying, treating, and living with Covid is that it’s hard to figure out what works. There are models, but we’re still kinda guessing. As of August 2021, more than one-fifth of all FDA approved drugs were tried as off label treatment for Covid. Ironically, there’s not enough Covid to study it.

“What should give us reason to be hopeful is that there’s this cumulative effect that if you give the right drug at the right time along the way…there are these 15-30% reductions at each step so if you are someone that gets a monoclonal antibody early on, if you get fluvoxamine, you get remdesivir on admission, you get dexamethasone once you are on oxygen. We should model out where this puts you at.” – David Fajgenbaum, Wharton Moneyball, August 2021

Ah not so fast, Eric Bradlow follows up. How independent are these? Is this like a piece of Swiss cheese? “It’s shocking,” says Fajgenbaum, “they all seem to hit it from a different angle.” That angle appears to be time. Vaccines are like sunscreen, David explains, and that’s the pre-infection prevention. Then it’s one drug to stimulate the body’s immune response, then it’s another to slow that response way down.

Abraham Lincoln is attributed as saying, give me an hour to chop down a tree and I will spend the first fifty minutes sharpening an axe. Rather than trees and axes we can ask: Is our situation a hurdle condition? With Mr. Lincoln and the suggestion of Charlie Munger to invert, always invert (!), we can come up with a simple situational:

For deceleration, we want to create a series of independent hurdles an agent must cross. In the case of covid this might mean that a place mandates masks, vaccines, and social distancing — or maybe just be outside.

For acceleration, we want to create fewer hurdles for an agent. If not possible, we want homogenous hurdles. Smartphones did this for ride sharing: the who (payments), where (location), and when (on-demand) were all integrated into an app. Another way to consolidate hurdles is find the JTBD.

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Even 17 months into it still feels early to say these are the treatments. While they may not be this approach still feels okay.

How to communicate well REDACTED

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Spoilers ahead for Andy Weir’s book, Project Hail Mary.

Chapter seventeen opens on the spaceship Hail Mary with Rocky staring at Grace as he wakes up. “Food! Coffee!” Grace tells the computer. A robotic arm appears with both. The food on Hail Mary is good. So is the computer. “It’s kind of cool that the arms will hand me a cup when there’s gravity, but a pouch when there isn’t,” Grace says.

Grace begins eating, then, “I look at Rocky, ‘You don’t have to watch me sleep. It’s okay.’ He turns his attention to a worktable in his portion of the dormitory. ‘Eridian culture rule. Must watch.‘ he picks up a device and tinkers with it.”

Ok, that settles it. “We have an unspoken agreement,” Grace explains, “that cultural things just have to be accepted. It ends any minor dispute.”

The heart of communication is one individual’s information becoming another individual’s information. Sometimes this is done explicitly. Tom Sachs made a video to encourage communication like “message received”. James Mattis wrote that the critical intent is summed up in the words “in order to”.

Another way to communicate is visually. Good visuals, for instance, are crucial for sports analytics. Don’t tell players what to do, but do show them. “This is always the point that gets made,” said Mike Zarren in 2019 ,”how do you integrate analytics into your organization such that is doesn’t feel like something alien.”

The structure of someone’s communication is probably related to their cadence (is it a pool builder or movie distributor?). For Mattis and the military it had to be fast and firm. For Sachs it has to be clear and certain. Grace and Rocky too have a high cadence, they have problems to solve.

Good communication is a great destination with no singular path. It doesn’t matter how an individual shares their information about the world so long as it becomes someone else’s.

NFTs and Gary Vee

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One way to support this time is different… is to say that the technology has changed. The smartphone’s GPS, camera, and chips all allowed a slew of businesses to serve customers in new ways.

Another way to see change is to ask the Bob Pittman question: is this another one of these? MTV followed from the idea of narrow-casting radio stations. If there was a rock station, country station, oldies station and so on on the radio shouldn’t there be something like that for television: a news station (CNN), a movie station (HBO), a music station (MTV)? This too was a technology shift.

“I believe there’s not a single sporting event or concert in ten years that the ticket is not an NFT. There’s no incentive for that organization or artist to launch it as anything but an NFT. A QR code or piece of paper means nothing. But if Luka Doncic drops a hundred points in that game it becomes a forever collectible. There’s a trillion-fucking-dollars worth of ticket stubs that have sold on eBay over the last twenty years.” – Gary Vaynerchuk, My First Million podcast, August 2021

A third way to consider change is to ask about the business model and the incentives. Sport is not a competition, sports is entertainment. Bob Iger wrote that he learned this lesson working the 1974 Olympics. “We weren’t just broadcasting events, we were telling stories.” There’s only one sport honest about this.

Are NFTs a new technology? Yes. Is this (NFTs) ‘another one of those (collectibles)’? Yes. Does the business model allow for this kind of innovation? Yes!

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Local maxima

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When stuck-at-home in 2020 my kids (12, 10 then) and I enrolled in the Marc Rober Creative Engineering course on Monthly. It was mostly above my engineering (and their in-depth interest) level but it was still great. We got to see Rober’s structure for brainstorming, more of the build process, and his thinking along the way. The hours of course video were like a documentary, a ‘Making of’ video.

One thing we saw was how Rober prototypes his builds. In the case of a making a candy launching device Rober made one using springs, one using compressed air, and one using hydraulics. The reason to prototype, Rober said, it to not get stuck at a local maxima.

Rober's sketches

We all have an idea for solving a problem and a lot of times we just do that. However in the situation we get more information. Rober suggests imagining a series of wooded hills. From the ground we don’t know which is highest (the best solution). So we need to hike up our best guess and look around from there. The hike up to, and the view from the top give us information on how best to act.

Rober’s process has come, in-part, from his years at Apple and NASA and making things like squirrel obstacle courses and glitter bombs. He’s a YouTuber with a very small staff, (no groupthink) so how might an organization avoid local maxima?

Rory Sutherland suggests following the bees. What’s great about Rory’s recounting is the structure. Organization direction is based on culture and incentives. Sutherland’s structure is one way to change the incentives.

“I think having two budgets, two sets of metrics, and two sets of incentives for exploit and explore. It would be utterly insane to learn something in a test and fail to exploit it by doing more of it. Make the most of what you know, but always invest twenty percent in what you don’t know yet. Bees do this where roughly twenty percent of bees ignore the waggle dance that tells you where to find nectar. The bees understand that if you don’t have these rogue bees the hive gets trapped at a local maxima and eventually starves to death.”

Part-of-the-question with a local maxima is the cadence of change: is a business more like Netflix or a pool construction company? Rober prototypes. Sutherland et al. ‘test counterintuitive things’. Some bees explore, some exploit. Each found a balance and designed a loose solution so not get stuck at the local maxima.

Profession-problem-solving

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The doctor solves problems by triage, prioritizing ailments.

The electrician solves problems sequentially, following the flopping electrons.

The athlete solves problems by focus, working on one-part of their craft.

The lawyer solves problems by history, finding the precedent.

The marketer solves problems by magic, directing the audience’s attention.

The banker solves problems contractually, creating a structure for future events.

The child solves problems novelly, doing without knowing.

The researcher solves problems by legibility, collecting and categorizing.

The engineer plays 3-D Sudoku, considering constraints of the world.

The artist solves problems via subtracting, removing what doesn’t move ya.

The sales agent solves problems with empathy, finding what a buyer wants.

The venture capitalist solves problems backward, asking ‘what leads to this?’

Most of these are speculative. Though individual answers may be wrong the broader point is not. There are a variety of ways to solve problems and sometimes a new point-of-view is worth more than forty IQ.