Not just OK OKRs

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?


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.

Danny Meyer is an Alchemist (and you can be too)

“A question that stymied me for years and years, a question I got almost anywhere I went, it seemed like every organization asked, ‘How do you manage to hire so many awesome people?’.

“I said to look for fifty-one percenters, people who are emotionally wired to be happier themselves when they delivery happiness to you.”

Danny Meyer, ILTB

The central idea to Alchemy is to optimize important but overlooked things, with especially large returns from inexpensive yet important finds. How to find these things? Numbers provide a good clue.

When things are easy to measure, they are numerate. These numerate items are easy to discuss, to compare, to enter into spreadsheets then sum, average, and compare again.

Danny Meyer has succeeded (in part) because he competes in new areas. In the beginning of the podcast he tells O’Shaughnessy about competing on food and wine and ambiance and all that, but that’s what everyone does. It’s hard to have THE BEST food when everyone is trying to have that.

THE BEST food has convention. It has history. There are norms. There is price. Having THE BEST food in New York City is like being the best investor in New York. Good luck.

However, being the best at something slightly different is quite a bit easier. There’s a lot more area and a lot less competition if you do things off the beaten path.

Meyer found this in hospitality. Listening, we don’t get the impression that the tag wags the dog, but it’s got to be part of the reason Meyer is around, and talking on the Invest Like the Best Podcast.

Often Alchemy is using (free) psychology rather than (costly) structure. Better service rather than better linens.

One story Meyer tells in the book is about ‘the medicine cabinet’. One establishment was having the normal rumble of friction getting its legs under it and when patrons had a bad time, Meyer and staff offered a glass of dessert wine to soothe their pain.

Not only was the wine complementary, but it was special. At the time, dessert wines were novel so it was a special treat. The kicker was that they were the cheapest wines Meyer stocked.

Alchemy is like improving weaknesses, there is a lot of return for the initial effort, often much-more than optimizing factor f for the tenth time.

Danny Meyer is an alchemist. From the people he hires to the businesses he starts.

You are an alchemist. Find something that’s important but not measured, and deliver that.

Mister…Horse Racing

From, An Economist Walks into a Brothel.

“The incentives are different depending on if you plan to sell or race a horse. If breeders raced their own horses instead of selling them, they might pair two different mares and stallions to breed. Selling well takes having the right pedigree and characteristics of a sprinter, both of which encourage in-breeding, but maximizing the odds of producing a good horse is more complicated. Ideally, breeders would match the male and female characteristics, balancing out weaknesses.”

Allison Schrager

What’s remarkable about Schrager’s description is the homogeneity of breeding. If outperforming in investing is about being different and being right there’s not a lot of being different at the track.

And this kind of makes sense. There’s better ways to “WIN BIG” than racing horses, where the returns probably aren’t financial but social.

To sell well, a horse shouldn’t just be (lineage) fast but it should look fast too. Like Munger’s fisherman, sales is a question of incentives, metrics, and framing.

Tracking Tom Update.

Tom Brady passed for a paltry 196 yards this weekend and is now only ahead of pace by 36 yards. However, the combined record of the remaining teams on the scheduled is 13-24 (Lions and Falcons).

Bad teams plus a rigid playoff picture means that our framework seems to be holding: more unknowns will inhibit rather than enhance Tom Brady’s passing yards for the season.

The Philosophy of Fish

Internet Archive, mentioned here.

"Let us suppose that an ichthyologist is exploring the life of the ocean. He casts a net into the water and brings up a fishy assortment. Surveying his catch, he proceeds in the usual manner of a scientist to systematise what it reveals. He arrives at two generalisations:

(1) No sea-creature is less than two inches long.

(2) All sea-creatures have gills.

These are both true of his catch, and he assumes tentatively that they will remain true however often he repeats it.

In applying this analogy, the catch stands for the body of knowledge which constitutes physical science, and the net for the sensory and intellectual equipment which we use in obtaining it. The casting of the net corresponds to observation; for knowledge which has not been or could not be obtained by observation is not admitted into physical science."

The ichthyologist goes on to explain, "In short, what my net can’t catch isn’t fish."