‘Good’ numbers

MIKE

This summer my kids were not going to watch too much YouTube. But, things changed. My eleven-year-old got into Moriah Elizabeth, a YouTuber into decorating and painting. Her channel is good. It’s interesting and entertaining. It, for me, avoids the overreactions and clickbait present on YouTube. She’s super positive and if not teaching kids how to be creative at least she shows them that it’s okay to mess up, laugh it off, and try again.

She wrote a book, Create this Book where each page is a prompt to draw only with polka dots, or draw a structure, or draw something without lifting your pencil from the page. We bought it. It’s fun. We do a page a day and laugh at or admire our drawings after.

This is to say that not all screen time is equal. But it’s easy to count and present equally. Apple offers a Sunday notification that your screen time was higher/lower than last week. That’s not really helpful. It would be like if a refrigerator displayed the calories consumed but not what exactly someone ate.

It also happens, says Betsey Stevenson, at the macro level during each jobs report. There’s the unemployment number and the initial response is that more workers are better. However it kinda depends on the timescale.

“When we see the ‘quits’ numbers really high that seems bad. In the short run we’re going to see fewer jobs. But it’s actually an optimistic time.” – @BetseyStevenson The Ezra Klein Show

People tend to quit their jobs when times are good and the next job is immediate. As people move about in the economy it follows that wherever they land will probably be a better fit, a win-win for everyone. But that’s hard to quantify.

One way to flip this problem is to restructure the counts. Basketball coach Todd Golden will redraw the lines on a basketball court. If a player shoots from inside the arc it’s worth one point. Shots outside the arch are worth four. That’s clever counting. Restructuring the way a player perceives the points is a way to find the ‘good’ numbers.

USA Swimming Analytics

MIKE

The first breakthrough in swimming was imitation. Like with high jump, seeing a new way to do things helped. The second breakthrough was underwater footage. What’s next?

Adi Wyner asked, is there anything beyond video helping with swimming improvements? It’s a good question. Let’s get some sweet advanced analytical fruit from the random forest up in here!

“We don’t have any tools to calculate instantaneous velocity, which would be the most helpful. It (the tool) also can’t be something that burdens the swimmer because if equipment is hanging off of them it changes how they are interacting with the water.” – Russell Mark, USA Swimming, July 2021

It’s the classic question: how do I know what to do?

It could be that baseball was uniquely suited to analytics: lots of data, one-v.-one matchups, less cultural importance (relatively). Swimming, Mark explained, has a lot of different body types and so there’s less data and fewer answers for “what to do”.

But it’s not completely empty. USA swimming for instance hosts the Olympic trials three weeks before the games. The thinking here, explained by Wyner, is that individuals vary in their performance but not too much during this competition window. If variance runs ‘in chunks’ then a proximate trials-games window makes sense. This theory might work, it is showing some alpha erosion as for the 2020 games Australian swimming has copied this schedule.

Luckily most of life is not the Olympics. The greatest athletes in the world looking for improvements “at the margin” is not the model. Most of life is answering questions like a 15 or 30 year mortgage? Most of life is just choosing from the good options, not finding the best one to the nth degree.

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It feels odd writing about luck without mentioning The Success Equation by Michael Mauboussin. There we go, it’s mentioned.

Favorites or the field?

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The top five S&P companies account for 22% of the index’s earnings and a similar percent of the market cap.

“To me that is an interesting market question right now. If you were a betting man would you take the other 495? Would you take the field or would you take the Lakers with LeBron, a healthy Anthony Davis, James Harden and Kevin Durant on the team too?” – Carl Kawaja, Invest Like the Best, July 2021

One way to improve decision making is to understand the mechanics of a system. The physics system for example is relatively stable and that’s why, with great work, engineers can land the Perseverance rover in a Martian area twice as wide and one-third as long as Manhattan. Other systems, like social systems, follow the rules of network effects like the friendship paradox.

Sometimes analogies help to understand the type of system. One sporting analogy is to take the favorites or the field. When Kawaja’s episode was released, the Chiefs and Bucs had a cumulative 33% chance to win the NFL big game. Sports vary though. In January 2020, three NFL favorites had cumulative odds of about 30%. Meanwhile the top three NCAAF football favorites had odds of about 75%. Three tennis players at the French Open get a bettor to better than ninety-five percent. Want to bet the PGA Master favorites? The top seven golfers only get you better than a coin flip.

Odds in January 2020

One reason to take the field is that more can go wrong than go right. Something is always happening and it’s more likely to be a “negative tail” event than a positive one. During the 2020-21 NFL season we guessed that Tom Brady would not hit the over on passing yards (he did) by guessing that injury, Covid, and new teammates had a much larger downside area. Kawaja recognizes this too, noting “guys get injured”.

It’s not that the field or the favorite is better, but which is cheaper relative to the expected returns. During the Big Game for instance, things happening (safety, two-point conversation, etc.) are priced higher because people like to bet more on something happening. Successful betting and investing isn’t about finding the best, but finding the best odds. Yes, the Chiefs and Apple are great teams but is there value in the high prices?

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Physics systems or social systems are wonderfully illuminated in Nassim Taleb’s book Antifragile.

Fire hoses and tea cups

MIKE

There are three ways to spend your days online. The broadest consumption of information is the Trend. A curated collection of information is the Feed. A laser focus is the Search. The best way depends on the situation. An ‘end of’ moment has more Search. A start has more Trend.

It’s not simple to know which way to spend a day but Jason Zweig beautifully addresses the balance of the three ways, the feeling of FOMO, and offering tactical advice on how to spend your day.

“If you’re drinking from a fire hose, which we all are, then the only sensible thing you can do is let it run. There’s no point in trying to put your face in front of the fire hose and open your mouth as wide as you can and take it all in. What I do is let the fire hose run and then once or twice a day take a little tea cup and dip it into the fire hose and pull it out and see if I like what I found.” – @JasonZweigWSJ, The Long View

This style of checking in feels slow. But then again, what does the work need? “Any recommendation to take action,” Zweig told Shane Parrish, “has to be compelling enough to overcome the inherent intrinsic advantage of just sitting there.” We design our own performance architecture and metaphors like fire hoses and tea cups helps us think — at least like Jason Zweig.

This time is different part 3, the high jump

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This is 1958 (via Wikipedia):
1958 high jump

This is 1964 (via Getty):
1964 Getty

This is 1968 (via Getty):
1968 Fosbury

High jump has always iterated in style but prior to 1968 each iteration was limited by the landing. When participants landed in sand they landed on their feet. As the pit changed from sand to wood chips to foam the form changed with it.

Normally we focus on the stakeholders and reducing the restricted action section. Sometimes limits are malleable but sometimes they have to be structural changes. Technology, even just foam, is an external change that might mean this time is different.

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This time is different: Part 1, ask what rules have changed? Part 2, use a coin flip or hurdle model, this time is different because only two heads, rather than three, are needed.

Landslides

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One idea (Rory Sutherland and Nassim Taleb talk about it most) that’s perpetually interesting is that in real life 2 x 5 does not equal 5 x 2. One perk of Central Florida is the theme park day trip. Going to the theme parks seven days during the year is different from a seven day vacation once a year.

The heart of this idea is the balance of effect and time. Sun-skin damage is like this. It’s much worse to get sun burnt twice a year than it is to get the equivalent amount of sun spread over many days outside. Stress follows this pattern as well, and sleeping on it tends to always make things better.

This (via Reddit) is the best visual representation of the idea. The same amount of material flows down but it reaches the town at different times. We used to live in Athens Ohio which would periodically flood and it was the same idea: effect over time. Five inches of rain in one day was not equal to one inch of rain over five days.

DAMN that’s interesting from Damnthatsinteresting

Marc Andreessen commented on this too with regards to the culture of work: “I’ve never really got the water cooler conversation thing at the office. Maybe it’s because I’m too introverted but I always thought the water cooler conversations were so facile, light, and substance free…I wonder if the in-person setting of an off-site, over a meal, over a drink where we aren’t under pressure or in between meetings or emails, where we actually get to know somebody might actually create much stronger relationships than someone you see at the water cooler everyday.”

If the mechanism is effect over time, we can consider how to extend, delay, compress, or shift some impact in time.

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Liberty addressed this in edition #149 regarding self-driving cars: “If they’re all communicating at very low latencies, it’s trivial to make micro-adjustments to avoid animals, and all other cars around would know what your car is planning on doing before it does it…To a computer, it’s all happening in super-super-slow motion.”

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March 28, 2022 update: This idea continues in the 20,000×1!=1×20,000 post.

Thorpe’s Two Questions

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Ed Thorpe is in graduate school and has a professor who is ‘mailing it in’. In class Thorpe stands up to the instructor, demeans him, and is threatened with expulsion. Needing to stay in school, if only to avoid the Vietnam War draft, Thorpe crafts a careful apology:

“I explained that I’d come to realize his teaching methods were unique and that students, though they may not always appreciate it rarely encounter a professor of his caliber. What I said was true, but allowed more than one interpretation.”

It was an early lesson that was almost quite costly. In the future, Thorpe started to ask two questions: “None of this would have happened if I’d have asked myself beforehand, if you do this, what do you want to happen? And, if you do this, what do you think will happen?“

Book: A Man for All Markets

Your *cost structure* is my opportunity

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“Your margin is my opportunity.”

Jeff Bezos

Businesses evolve to be better for the consumer. That is, to better fit the JTBD. In many cases that’s by making the same thing easier, cheaper, better, etc. Sometimes though, the job changes and the new job can be done in a easier, cheaper, better, etc. way.

Cheaper means a structural change. We made X like this, now we can make it like that and now X costs 7% less. Sometimes a business will disrupt itself and find a better way to make something. Amazon did this. When they started work on digital products, the books, music, and video business brought in seventy-five cents of every dollar.

But the job of books, music, and video was about to change. Convenience rose in importance.

Sometimes a business will make things cheaper by finding a substitute that allows for a comparable or better product. Sometimes a business will find that consumers aren’t that into X and would rather have Y, which is cheaper anyway.

Here’s a list:

The Walmart example kinda fits least but it’s also the least technical focused. It’s on anyway because it fits the spirit. To innovate – as incumbent or disruptor – requires a mindset of experimentation and a clarity of the JTBD.

Not just OK OKRs

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Sarah Tavel told Share Parrish:

“At Pinterest our growth team decided their OKR was monthly active users, a lowest common denominator thing. But if you choose the wrong metric you end up optimizing for the wrong thing, you’ll build the wrong features. Startups are incredibly resource constrained and you waste a lot when you focus on the wrong things. When the team realized this and changed the OKR to Weekly-Active-Pinners the entire roadmapped changed and we were able to serve the users much more successfully.” – @SarahTavel The Knowledge Project.

Tavel’s quote could be about 2000s baseball as well. The early days of baseball Moneyball were an era of what Tavel calls vanity metrics. At one point in the Michael Lewis bestseller, protagonist Billy Beane yells: We aren’t selling jeans! His point was that classic metrics like hits, home runs, or even body-type weren’t the optimizations he was looking for.

The problem that Tavel’s and Beane’s teams faced was a data collection problem. These metrics were mostly right and easy to collect.

“I have an allergy for vanity metrics. I can see a vanity metric a mile away. It comes down to intellectual rigor and being honest with yourself: what are you measuring and is it the right long term thing?” Sarah Tavel

Really wrong metrics push behavior in absurd directions. For instance, records used to earn certifications (Platinum, Gold, etc.) based on shipments not sales. Sgt. Pepper’s Lonely Hearts Club Band soundtrack (1978) was a Platinum album but was a sales bust. That’s what happens with an OKR based on shipments, not sales.

To their credit, the RIAA changed the rules for certifications in 1979. That’s what Beane did too. Tavel too. It’s a good reminder to ask: am I using this information because it is helpful or easy?

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Moneyball might be the best way to win in sports but sports is a story and stories need narrative. I loved the Tim Duncan Spurs but the media didn’t. It’s why there’s only one honest sport.

Weekly active pinners? Hold my beer.

Cruising mood

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One of Tyler Cowen’s suggestions for thinking better is to avoid mood affiliation. From 2011:

“It seems to me that people are first choosing a mood or attitude, and then finding the disparate views which match to that mood and, to themselves, justifying those views by the mood.”

This is clear in politics when people judge ideas on whichever party is blaming/praising on whichever media. Rather than the easy pickins of politics though, let’s journey a sunnier path: cruising.

Cruise ships are awesome. Many miss this thanks to mood affiliation. It’s not their people. It’s not their food (buffets!). I don’t want someone to dictate where to be and when is the comment I hear the most. Some non-zero number of people look at a cruise vacation and decide they don’t like it and then come up with reasons for why.

But cruises balance flexibility with stability. The only rules are the times the ship arrives and leaves. That’s it. In that window people can do nearly whatever they want. Cruises are like Crocs, they can be as laid back or “attack mode” as the vacationer likes.

Food on cruise ships is good. The buffet is good, especially the vegetarian curry options because that is home-cooking for the international staff. Ships also offer a number of (revenue growth) fine dining options. The best of these are magnificent. It won’t be extraordinarily but how many people prioritize this on vacation?

On board are a variety of options like rock walls, FlowRiders, theaters, slides, escape rooms, and kids clubs. Off the ship are many interesting tours, excursions, and experiences. Private drivers are especially adaptable, this is another Tyler Cowen suggestion.

Look at that form!
Flowing

Cruising is not for everyone, but maybe not for the stated reasons. And Cowen, probably couldn’t stand cruising.