This = that

A short list of our fast thinking.

Expensive = good. This is many places, one of which is the opening story in Robert Cialdini’s book Influence.

Action = progress. Used well when Headspace ‘embodied’ meditation. Used less well when helicopter parents hover.

The category = the JTBD. For example, the Leatherman was not a knife it was a tool, not a tool but a gadget. Similar, the 3M Command Strips solve the job rather than fill the category.

1×20,000 != 20,000x 1. This is the idea that averages don’t always convey the best information. A small bit of something regularly is not the same as all of something at once. The Credit Karma Save program for instance. Travel too, writes Rory Sutherland is like this.

Argument = dislike. Part of the obstacle to arguing well is our social and evolutionary norms. (Added 3/30/2022)

Unrelated, we can update the base rates on March Madness. The cumulative Final Four seedings continues its trend, this year the sum is 13. The first post on March Madness matchups is here.

The Madison Avenue Effect

Imagine a unique creature.

Now, imagine another unique creature. Make this one larger, like an elephant. Make it colorful, like a toucan. Make it smooth, like a frog. Give it a beak.

Imagining the second is a lot easier than the first because the second is familiar. About this big, about this color, etc. Familiarity changes the way we think. Familiar things are ‘more right’.

Here’s how to spot it: “I didn’t know that…”. People have to see it to believe it: Alton Brown in Italy, Richard Thaler saw value theory, Ezra Klein read a blog, and for Marc Andreessen it was Night Rider. For ‘Madison’ it was the movie Splash.

For, The Boy Who Played with Fusion, it was the C.L. Strong and Jearl Walker DIY articles. “When I got a hold of a secondhand CD-ROM collection of those columns, my life changed,” Taylor says. “I realized there were these world-class experiments that cost millions in top laboratories that you could replicate at home.”

The familiar is more accessible. Connections aren’t divine so much as they are historic. Exposure creates creativity seeds. For now we can call this the Madison Avenue Effect.

Words hiding value

Patrick O’Shaughnessy asks Gaurav Kapadia what makes a great business. It’s all the basic stuff, “but really when you go down to it, if you look at a lot of the great businesses, they’ve created niche monopoly things. No one likes to say it because you’re not allowed to say it.” Kapadia lists at least four monopolies: cable companies, software companies, aircraft engine manufactures, and medical device companies – but the real insight is no one is allowed to say it.

Names mean competition. If something is unaddressed with words it’s less available as thought and underpriced in cost (the market mechanism).

Our new dictionary series highlights the opposite end of Kapadia’s point. New words new thoughts.

Later Kapadia talks about diversity and inclusion in the investing industry. “I don’t think anyone’s heart is in the wrong place, I think everyone’s heart is in the right place. So we have to stipulate that, people really care, but so many decisions are made by network. And so the only way you can break down existing network effects is with data.”

For words like monopoly the network has agreed on one meaning, and it’s a mispricing. For words like diversity the network has agreed on one meaning, and again it is mispriced.

The same week Mike Prada joined Wharton Moneyball and was asked a kind of ‘what’s next in basketball?’ question. One thing Prada pondered was what if Memphis is playing the next form of basketball? There’s no fast break or half court offense, only running. Types of offense thinking, like monopoly and diversity, hides value.

2021 speak

Language is a marker. It’s a symbol of our basic Bayesianism – the more we use some words the more important the ideas behind them are. Here’s our collection of interestingish words, so far. Here are some 2021 additions.

“Uncached questions.” When an interviewer asks an interviewee a question which may require longer thought for a more thorough answer. Per Wikipedia, a computer cache is a component that stores data so that future requests for that data can be served faster.

“Dog in the race.” As in, I don’t have a dog in this race. Growing up it was dog in this fight. I suspect it will evolve further to dog in this pageant.

“Double click on that idea.” Even though the days of roller ball mice are in the past, this comment still pops up like an advertisement for Windows in 1995.

FOBO“, fear of a better option. As in, I have FOBO and don’t want to decide now.

“Makes perfect sense”. This one is a caution flag. Some say it makes perfect sense that the hybrid immunity (Covid plus vaccines) is greater than vaccines or having had covid. I don’t remember this coming up ex-ante. Instances of MPS need to be more predictive than descriptive.

“Breakthrough”, something years in the making which gains distribution. As in, the Covid mRNA vaccine was a breakthrough.

Related: digital modifiers like going online.

Words from Wharton

Sometimes we just need the right word to explain an idea which leads to action. Having a name for a thing changes the way we think about it. These are some of my favorites from the Wharton Moneyball podcast.

Let’s be precise. For instance, what does herd immunity mean? Often we are not precise.

What’s the effect size? There are a lot of things we could do, but which matter most?

Short the narrative. In sports there’s a narrative that drives the stories. Often the narrative is overpriced.

The most parsimonious explanation. I can never remember if it’s Hanlon’s or Occam’s razor. This and ‘short the narrative’ pair well together, like the blades of a scissors.

Mean reversion. Outcomes are combinations of skill and luck. Skill mostly persists, luck mostly does not, hence the Madden Curse. But(!!) skill isn’t static. If one player has a great year, the next year they might have a better year because while their luck component contracts, their skill share expands.

Coin flip. Statisticians (and artists) fall in love with their models. The coin flip is a Zeckhauser-esque simplification. How often will a team win three-straight games? One-eighth of the time.

Favorites or the field. We’ve covered this one. (Twice)

Tennis variance. Fewer events means more variance. Tennis events, like the Olympics, may have more upsets. This could also be part-of-the-reason there are more dominant men than women.

Update my priors. To change ones view with information. It’s being Bayesian.

It was fiction that focused the idea of names.

The day the *hobbies* died. Bye, bye thanks-to-America-Online…. (To the tune of American Pie)

One way to notice change is to notice the words people use to talk about changes. The online shopping of the 90s became just shopping. The online banking of the 00s became just banking. The online dating of the 10s became just dating. The online communities of the 20s, well you see where it’s going.

“The Internet has just killed hobbies. They’re dead. They’re gone. The concept doesn’t exist. The concept of ‘having a hobby’ died at the exact same time as the concept of ‘going online’. This was a phrase you heard constantly from 1994 to 2005. You get home and you ‘go online’. The big company was AOL, America ‘online’. Around the mid-2000s people stopped ‘going online’. Why? Because we were online all the time. The idea of not being online is now the weird thing.” – Marc Andreessen, CSPI podcast, August 2021

I remember this! You got home from school and you signed into instant messenger and entered the Yahoo euchre room. Good times good times.

Having a modifier doesn’t mean something will become the new thing, but it does mean it’s different and may be worth our attention. A few others: autonomous driving, crypto currency, digital wallet, online learning, distance education, internet friend, gig economy.

This time is different happens with technology changes and the descriptions offer a cutting edge hint.

The itty-bitty-shitty-committee

The itty-bitty-shitty-committee is that voice in your head. It’s the chatter.

“The chatter is the zooming in really narrowly on a problem and getting stuck and spinning over and over in ways that are dysfunctional and destructive. We want to get rid of the chatter that gets in the way of your job, your relationships. and your physical health.” – @Ethan_Kross on Armchair Expert

I’ve been in that loop, in that cartoon whirlpool. I’m the bumbling sea captain. I see it. I try to avoid it. I can’t get out of my own way. Which is kind of wild, being the captain of this ship of one. Kross suggests reframing during rough seas.

It’s not a free bag, it’s a bag that’s been paid for. It’s not a free coffee, it’s a free coffee that’s been paid for. I used to advise college students that anytime they saw the word FREE on campus they could interpret that as “Your tuition pre-paid this for you.”

Time is also a good way to reframe a situation. Do I remember a situation like this from three years ago? No. Then I probably won’t remember this one three years from now. This kind of framing was especially good when my daughters were young. My wife used this too only her mantra was: this too shall pass.

Kross’s specific suggestions echoes Jenna Fischer‘s career advice. Fischer said she looks at herself as the CEO and the product. The boss Fischer said that headshots had to be done by a professional. The talent Fischer had to tell her photographer friend.

“Distance self-talking involves coaching yourself through a problem using your own name like you’re talking to someone else. We are much better at advising other people than ourselves…when we use a name to talk to ourself it changes the perspective, it’s a psychological jujitsu move.” – Kross

That’s incredible reframing. And it works!

If we remember. Usually when someone cuts us off on the road they’re an idiot. When we do it it’s because we’re late. Maybe that’s part of it. We see things differently when the information changes and a simple switch in internal dialogue can create big switches outside in our actions.

Dax Shepard and Kross talk about the IBSC around 31:20. The distant self-talk reframing is known as Solomon’s paradox.


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.

Zombie revenue

One tenant of jobs to be done is that people tend to be not great at articulating the scope of a purchase. For instance, in early June 2021 the lumbar support on my car seat broke. There are no plans to fix it, and this deficit will be some kind of non-zero explanation for when it’s time to get a new car. Will I reason with this later? Unlikely.

JTBD exists in these moments. One moment is when users hack a product. For instance 60 jail broken iPhone features became part of the iPhone. Or even Instagram, lauded for the design choices, drew from teenage boys taking screenshots of solid colors, adding text, and posting as the first polls.

Another according to JTBD father Bob Moesta is zombie revenue. Gym subscribers may make their model work but other businesses can find future fruitful funds in dead accounts. Basecamp, Moesta said, noticed that archived projects were zombie revenues. Customers didn’t need to manage something but they did need to access it and Basecamp created something for them.

Source: Bob Moesta
Full JTBD post.

Incentivizing outcomes or optics?

These circles overlap to some degree in every situation. A minimal overlap situation might be the coder who wears sliders and hoodies and the banker who wears suits and slacks.

Outcome (noun): something which matters, is measured and measurable. Examples: sabermetrics, code, sales.

Optics (noun): something which might matter, however is unmeasured and unmeasurable. Examples: appearance, attention, cultural expectations..

Things which are difficult to measure will be evaluated by optics. In these conditions it’s best to maximize optics.

Things which are easy to measure will be optimized on their measured quantities. In these conditions it’s best to optimize.