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.

My 62 Favorite Ideas

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Are you familiar with “the travel guide”? Before the internet, maybe still – I don’t know, people bought books that acted as guides for the things they wanted to do. My shelves have/had: Italy, Disney, Disney, Orlando, and the Bahamas.

The guides gave a nice overview. Here’s what to know about the Sistine Chapel. It wasn’t a substitute for going and gawking, but the guides were a map, combining: geographic, informational, cultural, and other bits of information. That’s what I made, an idea map.

It’s like a travel guide. Each entry is short and to the point. Each entry also connects with other entries. A travel guide might say something like: “make sure you visit in the morning and stop at the nearby coffee shop after”. That’s a considerate connection, two attractions that are nearby in space and time (low crowds, tasty treat after standing). My guide does that too. Here’s two examples:

Alpha erosion

Alpha erosion is the idea that advantages erode as the market notices a success. When an organization balances the explore and exploit nature of work, it will land on opportunities to deliver value and earn profits. Competitors will notice and attempt to recreate this success. Sometimes competitors will succeed, even outperform, and sometimes they will not. The best way to avoid alpha erosion is to not be noticed. There are at least two ways. First is the path taken by Amazon, where the company was unprofitable but valuable and the desire to imitate was limited. For many competitors, unprofitability was a restricted action. The second is to create alpha in a business where the rewards are unappealing. There are many people who want to be movie producers or winemakers, but many less who want to operate a regional chain of construction dumpsters — even though the latter suffers less erosion.

&

Explore and exploit

Explore and exploit is the idea of a spectrum of work between exploratory work and exploitative work. At any given time there’s a better area on this spectrum to be for an organization as well as an individual. One way to view the explore and exploit spectrum is through two different businesses. One business is a streaming media technology firm. They have a direct relationship with their individual customers and bill them monthly. They also work with the providers of media to create content for the customers. Both the providers and the customers have a JTBD. The providers want freedom. The customers want choice, uptime, and lower bills. The competition meanwhile wants alpha erosion. This business must quickly move back and forth between the explore and exploit ends of the spectrum. They must innovate in delivery, technology, and marketing then implement each. A different business is the regional construction company. They too have customers who want a new kitchen or pool and they have suppliers who specialize, subcontract, or deliver supplies. But the regional construction company has to move back and forth at a different cadence. Someone’s system suggests their location on the spectrum. It is also rare for a situation at either extreme. Even the regional construction company must allocate resources to exploratory ends. The location between explore and exploit can guide a person or organization towards what type of work is best for the moment.

For the ideas in a daily email drip, buy the email-drip, pdf, and ePub in one package on Gumroad. Find it on Amazon too.

Swedish-style as a service

MIKE

People love IKEA, to the effect of nearly one billion annual visits. The flat pack furniture and furnishings yields twenty-four billion euros in revenue each year. But could there be more in store for this store of galore?

One way to find business opportunities is to observe users and follow their lead. Instagram for example, developed both polls and shops (in-part) because users hacked those features before they were available. IKEA faces a similar opportunity.

If you’ve never been, IKEA is organized as an upstairs showroom and a downstairs warehouse. When a customer likes a lamp upstairs they note the aisle and bin code and when downstairs find the item. An upstairs room might look like this:
An IKEA "show room"

For larger item like couches and shelves, customers do the above and haul, unbox, and assemble their purchase. Flat packs, material selection, design choices, and scale all contribute to IKEA’s success.

Here’s the pitch: IKEA as a service.

The upstairs showrooms have appealing arrangements. It’s modern. It’s clean! For this made up start up an IKEA specialist comes to customer’s home to clean and arrange it in the flat packer’s fashion. The program includes a points program, where customers earn points toward future delivery and installation of IKEA products.

An IKEA saas offers a few advantages: recurring revenue, reduced churn, and a chance to grow their customer base. Wow Mike the house looks great, someone might say and of course I would tell them about the service, and offer my IKEA referral code.

Consider cleaning a car. My car isn’t new but it looks new after a good cleaning. The same thing occurred to college-me while shopping at The Gap. It wasn’t the clothes that looked good, it was the manikins! If I wanted to look good it wasn’t the clothes I needed, it was the body. Some number of people must do this at IKEA. Their goal is appearance and one way for that job-to-be-done is buying IKEA products.

The IKEA effect may be taken but this saas business might have great legs, like the beautiful bamboo ones available at IKEA.

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Made up start ups is an ongoing series. They’re intended to be half-tongue-in-cheek and half-serious. The point is thinking in different ways, like Tyrone.

Apples to apples in Iceland

MIKE

The basic base rate question is: what should I expect in situations like this? Most often we have looked at base rates through the lens of projects. We have an optimistic tendency to think, “yeah but…”. Sometimes it is! Sometimes it’s not.

but it might work for us

The general advice for using base rates has been to start with them, rather than our impressions, and then adapt from there.

Another way to think about base rates is as sampling. It’s important to get the “situations like this” part right, right? This is tricky, and this came up during the summer of 2021 as more and more covid vaccinated people became infected with the covid virus. At one point 67% of Iceland’s cases were among the vaccinated.

“When you look at Iceland and graph out (cases) by who is vaccinated, who is not, and where the cases are, you can see that there are more cases in the vaccinated group than the unvaccinated group.” – Dr. Kat, NPR Planet Money, August 2021

That sounds like the vaccine doesn’t work, or doesn’t work as well, or never-worked?! Maybe, but maybe our conclusions are muddied by an initial assumption that’s wrong.

Rather than jump right to Iceland, let’s pull a Zeckhauser and simplify everything. Imagine in Indiana there is a group of 100 people, half are vaccinated and half are not. In the vaccinated group there are five infections and in the unvaccinated group there are five infections. Putting aside “long-infection”, hospitalization, and death, it-looks-like, in-this-case, that the vaccine is meh.

Okay, now in Nevada there is another group of 100 people. This time there are 90 which are vaccinated and 10 are not. In the vaccinated group there are five infections and in the unvaccinated group there are five infections. Putting aside the same other-factors, in this case the vaccine is doing a lot of work! This was the case in Iceland too. Six of every thousand vaccinated people caught covid while fifteen of every thousand unvaccinated people caught covid. And all of the other-factors were much worse for the unvaccinated group. Vaccination reduced someone’s risk by more than half.

This idea is known as the “base rate fallacy” but really it’s comparing apples to apples which will make the idea stick better anyway(another bit of Zeckhauser advice is to keep explanations simple). BRF is good for talking with economists and behavioral scientists but for implementing this idea it’s an apple-to-apples question a day that will keep the bad decisions at bay.

Travel budgets

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Actions are the children of mindset and environment.

When running his document storage company, AJ Wasserstein created a travel budget. Budgets are good. Budgets are a design tool, and we are all designers.

Wasserstein’s budget wasn’t denominated in dollars, it was in days away from home

“One thing I did while working at Archives One was give myself a travel budget. I gave myself permission to travel a certain number of days a month. It wasn’t a financial budget, rather a nights-away-from-home budget. If I started to exceed that consistently, my role at the company needed to be cleaved and I had to hire someone to do part of what I was doing.” – AJ Wasserstein, Circle of Competence, June 2021

Wasserstein asked a different question. Rather than ask what was financially costly he asked what was socially costly and optimized for that. A lot of times we assume that the important is easily measured. Dollars? Yes. But other things too.

Peloton ease

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Economist Tyler Cowen cautions against the optimism around self-driving cars because when costs fall, consumption rises. If the costs of driving fall, there could be a lot more cars on the (now congested) road. Cost isn’t just about price, but also understandability, beliefs, and time.

Another way to think-like-an-economist is to consider ease. Every time a how will I… question gets answered things get easier and Peloton answers a lot of questions.

Wooden barrel

A wooden barrel like this can only hold water up to the shortest piece. Each answered how will I… extends the length of that board. Extend the set and action is taken. Here’s Christian Hunt on his background to buying a Peloton:

“My partner brought it up…we had been bombarded by advertisements…I knew a few people who had them and it just got to the point where we thought, ‘Let’s just give this a go, we can return it if we don’t like it.’ And the people I spoke to about it were so positively engaged. Worse case scenario: this thing goes back.” – @ChristianHunt, Human Risk

Just in that comment Hunt hints at the many boards that lead to a Peloton purchase. There’s price (finance it!), usage (we’ve got classes), social (follow your friends), competition (leaderboards), and even logistics!

When surveyed why they bought a Peloton, 78% of people said convenience. Consciously that means convenient to use but really it is everything.

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Wood Barrel, via Wikipedia.

From field to city to car to circuit

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This is a podcast episode covering the consumer journey from field to city to car to circuit.

The consumer journey has been one where a business shares information to a consumer depending where they are. That started at the farm with the creation of the Sears catalog, a moved to the city with the creation of stores, then moved to the car with the creation of malls and large big box centers like Walmart, and finally our story is at the point where it is on the Internet with online brand Zappos, Amazon, Warby Parker.

The selling, at least to the American consumer, is remarkably consistent. There has to be a way to talk directly to consumers whether in a store on the pages of a catalog or via an Instagram account. There has to be a way to get the product to the consumer, whether that is the new railway system, the rural mail delivery, or two day shipping.

This episode was a little less organized than normal and recorded outside. Thank you for your patience.

The podcast is available as Mike’s Notes: Apple, ListenNotes, or Overcast.