Disqus - Latest Comments for vgururao

Re: "The Fall Of The Messiah Leader"

Venkat — Wed, 16 May 2012 13:28:33 -0000

Debra:

Yes, I believe charismatic leaders are often (but not always) founders. Jack Welch is the original counterexample of course.

You may be right that they accompany the "next big thing" but in every wave, I suspect the charlatans will outnumber the genuine ones, because it is so much easier and more lucrative to fake charisma than to be substantially great.

Re: The Russian Doll Model of Economic Growth

Venkat — Mon, 26 Mar 2012 16:37:57 -0000

I think you're going to end up in serious trouble with definitions. For example, your innovative/competitive distinction is at once too narrow and too broad. Disruption is usually considered an innovation move. I personally consider it a refactoring of market segment boundaries in most cases. It is often zero or negative-sum in its transactional economy effects, but positive sum in terms of attention economy effects (releases more attention than it occupies, in displacing an incumbent). On the other hand, new frontiers are not necessarily non-competitive. You can have a Manifest Destiny race towards a theoretically identified goal for example, winner take all.

Your take on PMF is also not what startups usually mean by the term.

That said, this spherical shell visualization has potential. We've already debated about whether the attention economy belongs in the outermost ring. The logic of your shell arrangement is sort of phyllogenetic, in evolutionary order. But it is unclear to me that the structural order is necessarily the same (for example, spinal cords evolved after exoskeletal organisms... spines are "deeper" in a sense). I think it is the structural order that might matter.

From that point of view, the attention economy might actually be the innermost shell, pre-relationship. You then get increasing de-personalization as you head outwards radially. Maybe the outermost shell is a purely exploitative Gollum economy, where transactional economics degnerates into pure extraction/harvesting economics. The person goes from being a full person at the core, to a related person next, to a political subject, to an economic subject, to a chewed -up piece of trash.

Re: Learn From People Like You – Learn By Observing People Unlike You

Venkat — Mon, 20 Feb 2012 11:15:33 -0000

An example of learning a blind spot from observing others who are different might be helpful here.

Re: Loss Aversion and The Zombie Clicking Trap

Venkat — Fri, 10 Feb 2012 14:34:14 -0000

Tristan Harris (who you met at that dinner when I was out there) has been thinking a lot about this exact thing. He brings it up every time we chat. You should talk to him about it the next time you run into him somewhere.

Re: The Rise of Developeronomics

Venkat — Sat, 10 Dec 2011 19:13:43 -0000

Good points... I think the answer to the paradox is that the potential of software increases faster than the installed capacity of "solved" problems. For every WordPress that nails a problem properly and makes it unnecessary to redo, 3 more exciting ideas seem to crop up. Perhaps this is because there are so few physical laws constraining computing (P!=NP is really the only serious conjectured "law")

I wrote a bit about this in an earlier post, http://www.ribbonfarm.com/2...

(the phenomenon is also related to something called Jevon's paradox: http://en.wikipedia.org/wik... )

Re: Are Ranjit and Chad endearing or offensive?

Venkat — Wed, 09 Nov 2011 02:37:19 -0000

They are hilarious, not offensive.

Re: A Pilgrimage Through Stagnation and Acceleration

Venkat — Wed, 02 Nov 2011 13:47:07 -0000

What you are calling 'lurking drag' reminds me of the 'moving bottleneck' idea in Eli Goldratt's "The Goal" (it is a fictional story to teach the basics of the operations research phenomenon of moving bottlenecks).

The prototypical example is a machine shop. At any given time, there's a critical path and a bottleneck on that path. Improving efficiency there helps improve overall efficiency, while improving efficiency anywhere else is a waste of resources. But the moment you improve the bottleneck beyond a certain point, it is no longer the bottleneck -- the bottleneck has moved to the next-most-constrained point. So you keep swatting one bottleneck after another, whack-a-mole style, and overall performance keeps improving. Another way to think about it is that everything else EXCEPT the bottleneck is over-designed. If you cannot improve the bottleneck performance, and are at some sort of fundamental limit, you can then gain by reducing performance elsewhere and getting rid of the excess capacity away from the bottleneck.

An optimal system in this sense is one where every component is designed to perform at the peak capacity of the bottleneck with the tightest fundamental limit. Every point in the machine shop flow is at maximum capacity utilization.

Machine shops are good examples for thrust work that produce something. If you alternately think in terms of resistance/load-bearing work where nothing is moving, the bottleneck is the single point of failure most critically near failure (imagine holding a bucket that's increasingly weighed down... which bone/muscle will break first?). The weakest link, in other words. You can strengthen the failure point until the weakest link location moves. As with moving bottlenecks, the optimal system is one which fails simultaneously at all points. Mathematically, the two are roughly the same (though the physical system is usually a discrete network dealing with a stochastic work queue in the first case, while it is a continuous system under a continuously varying load in the second case... you get systems of stochastic difference equations or stochastic partial differential equations respectively, but the model structure is the same).

For human striving, this provides a useful metaphor and goal for mindful living: you try to bring your whole life into that critically poised state where you are limited only by your lowest fundamental limit. You can then try to push on that limit (since you won't know you're there until you test it), making sure to take the rest of the system with you, by keeping it in the critical state.

This is how I read the common trope in movies with "enlightened master" characters (such as the old teacher in Kung-Fu Panda). The teacher ages, and at some point dies by simply dissolving into a cloud of petals or something (instantaneous failure throughout the system).

I like this whole idea the same way I like the idea of general equilibrium in economics. It is an interesting idealization to motivate certain types of analysis, but I am not entirely sure you can get anywhere near this "critical system" state starting from arbitrary points (genetics, birth situation) within the normal human lifespan.

Re: Escaping the Attention Economy, Flirting, and Escalation

Venkat — Wed, 06 Jul 2011 13:19:52 -0000

This flirtation idea is growing on me. I too have noticed what you point out, that it dips when a relationship deepens. It also includes other behaviors from people who aren't publicly active (and therefore cannot flirt by retweeting etc.): in my case, they often forward very appropriate email links (voluntarily serving as a very high quality filter), point out typos or fixable blog post weaknesses in private rather than in the comments section, etc.

Re: Announcing Apture Hotspots: Your curiosity is the web’s missing link.

Venkat — Wed, 29 Jun 2011 17:18:35 -0000

Congrats Tristan. Excellent work!

Re: Unifying the Value Universe

Venkat — Wed, 29 Jun 2011 11:31:13 -0000

Very solid start. I believe you've identified the key axis variables. I think this is solid enough to actually use as the basis for a more mathematical model around transaction costs. For example search costs decrease as you go right on the relatedness axis, negotiation costs rise as you go up the refinement axis (because of less standardization and other product attributes that favor clear pricing, and therefore less haggling...).

I think this is not even a 2x2. It is a more general cartesian plane on which you can do continuous calculus. Since you have a fortuitous last name, let's call it the Rader plane. For example, you could represent the entire history of a relationship as a trajectory on this plane (and heh, heh, you could say things like, "that product/personm is now on my Rader")

Some questions/comments I have for you:

1. Is it really value of the transaction or the value-add of a transaction? A gold ring given to a fiance has 3 components: gold (commodity value, easily priced), craftsmanship (branded/art value, fashion-priced) and sentimental value (not cash priceable at all BUT can probably be preference ordered in relation to the others and can depreciate/appreciate as the relationship does).

2. I think high refinement is likely to be easily priced because of some sort of social-proof/imitation effects creating a volume supply and making supply-demand dynamics easier. Unrefined objects/services tend to be unique. Refined objects/services tend to be at least partly identical, or quantitatively comparable on key attribute vectors. I know some bureaucratic journal paper reviewers who barely even LOOK at results in submissions. They go straight to the citations and look for number of citations, presence/absence of citations that indicate which "camp" the work falls into, and so forth. The question... how do imitation/social proof create a "market" via facilitating comparisons?

3. I think your view of attention marketing needs to be refined into a trajectory view. An marketing relationship is NOT a point transactions. It is a series of transactions. I suspect these weave their way across the Rader plane. Can you draw some mathematical inferences? Like is the path integral = trust or something?

4. Another reason to use trajectories is that it allows you to analyze an important missing component: time. At zeroth order, a transaction occupies a certain amount of time, and for a bottom-right transaction is exactly equal to attention "given." Elsewhere on the Rader plane though, the attention itself has intrinsic value because the value exchange becomes practically an excuse for spending time together with people whose company you enjoy. How do you factor in this "transaction value" (by analogy to Coase's "transaction cost"... a sort of positive transactional externality that can become larger than the core value).

5. Another reason to use time somewhere is that I think relationship and gift economies are more willing to defer gratification or have it diffuse into the general economy of the related small-world of people via a pay-it-forward effect. It's a "pay me back, whenever" or "just do the same for someone else" type expectation. This confuses calculations a bit, but I think you can handle it. Regular money is basically legible debt with defined parties and counterparty risks. Other quadrants have other kinds of debt and currency equivalents. Instead of solving a dual coincidence of needs in a clean way by balancing the books at the micro level, they use sloppy book-keeping and solve multi-party coincidence of needs using sloppier collective balance books that track more lumped variables. For example, people who routinely eat together often take turns paying for meals, but don't keep track and expect it will "all even out in the end" and only notice if one party routinely freeloads. How do these sloppy book-keeping models work? What fuzzy currencies are at work? What lumped variables do people mentally track within the 7+/2 Miller magic number constraint (since the reason regular precise accounting won't work is precisely the complexity at larger scales which cash currencies solve)?

6. Finally, I'd like to see the information-theoretic angle here. My own interest is in analyzing this whole bucket of stuff using a time/entropy/information/energy analysis. Not at Jaynes level of technical analysis, but at least loosely.

Enough for now. I think you've struck on a deep vein here that can be mined a lot more, and the real value is probably a dozen feet of tunneling away.

Re: Escaping the Attention Economy

Venkat — Sat, 25 Jun 2011 18:41:30 -0000

I am not sure I understand. Are you making the distinction between attention that can be directly monetized and attention that requires some collaborative actions? What's an effective example of conversion that is not content marketing/direct conversion?

I think copyblogger is an excellent example of what you are calling a solopreneur (though they are not solo). They write about copywriting and sell community memberships, classes, some software etc.

Are VC bloggers good examples? They monetize their blogs indirectly by getting privileged access to edge dealflow for example, or first-shot at talent spotting in their comments sections.

Re: Episode #61 – 7 Reasons Why Your ‘Four Hour Work Week’ Business Is Failing

Venkat — Tue, 31 May 2011 22:53:53 -0000

Hmm... I haven't thought my concerns through, but I think what worries me is the slow emergence of a major global class system with two major classes, separated by a sort of digital divide. Such divides always lead to trouble brewing.

This Atlantic article captures some of my concerns: http://www.theatlantic.com/...

Though this article is about the super-rich, I see the same dynamics emerging at a micro-level in the global lifestyle-design class: a tendency towards acting like a nation unto themselves that isolates itself from the rest of society.

The divide exists in Las Vegas, where I am now, between the invisible (and secretly resentful) service classes and the rich who jet in and out. It exists in America as a whole between Blue and Red America (something that hit me hard as I just finished a 3 week road trip through the heartland). It exists in India between the IT sector in places like Bangalore and the rest of the country.

My phrase "global cultural integration" is perhaps poorly chosen. I meant some effort to make sense of the global socio-economic system and the effect of our actions on it and in it in relation to those of others'. In fact globalization has little to do with it. The main dynamic is not between local and foreigner but between member of the cloud that floats above and member of the ground below.

Arbitrage by itself is fine, but something about the way Tim Ferriss framed the model bothers me. Perhaps it is an overall tendency in his story to play by the letter, but not the spirit of the rules.

And yeah, since you mentioned the middle class, it bothers me for similar reasons, but not as much, because the majority of the middle class strikes me as far too stupid to think about what they are doing. But the new global elite, to use the Atlantic's term, is decidely NOT too stupid to think about what they are doing, and yet seem to perversely refuse to do so.

For the record, your blog/podcast is one of the rare exceptions :)

But my thoughts are still muddy. I'll blog them when I clarify them.

Re: Episode #61 – 7 Reasons Why Your ‘Four Hour Work Week’ Business Is Failing

Venkat — Tue, 31 May 2011 01:18:18 -0000

At some point I'd like to read about your interactions with locals and the local economy in places like Bali. When I visited, I got the sense that the expats lived in a bubble, which I think is dangerous for the long term viability of the TropicalMBA lifestyle.

At some level, that has been my problem with Ferriss. He represents a very cynical kind of currency arbitrage. Especially given the vast potential of the lifestyle to serve a global cultural integration function that goes way beyond both charity and Eat, Pray, Love superficiality.

Re: You Read the 4 Hour Work Week. You Failed. Here’s What You Can Do About It.

Venkat — Wed, 25 May 2011 10:52:20 -0000

Thanks for belling the cat. The 4-hour workweek is a great thought starter, but as actual advice, it is basically silly.

Your point about family/friends is particularly important. Worth a separate post.

Re: Does YOUR kid have shoes? : Never Stop Marketing

Venkat — Tue, 24 May 2011 12:54:34 -0000

Thanks for the shout-out Jeremy.

A famous scientist (Richard Hamming, inventor of modern coding theory) once said the following:

"There's another trait on the side which I want to talk about; that trait is
ambiguity. It took me a while to discover its importance. Most people like to
believe something is or is not true. Great scientists tolerate ambiguity very
well. They believe the theory enough to go ahead; they doubt it enough to notice
the errors and faults so they can step forward and create the new replacement
theory. If you believe too much you'll never notice the flaws; if you doubt too
much you won't get started. It requires a lovely balance."

It's one of my favorite quotes. "Don't buy your own bullshit" is in some ways too harsh. That suggests that you are puling a fast one on others while staying disbelieving yourself. Truly enlightened commitment to a mental model requires this "lovely balance" between doubt and actual belief that Hamming talks about.

Hamming's full essay if you are interested. It's about how to do great research, but I think it can equally be read as "how to do great marketing."

http://www.cs.virginia.edu/...

Re: Rising Income Inequality & Shifting Identities – The Specialist & The Omnivore

Venkat — Fri, 13 May 2011 12:05:06 -0000

I think I'd separate the idea of specialization from the idea of scaling/losers. Deep specialization can exist without mass production economics. Mass production specialization is only one kind where you become what I call a "mindless specialist" who becomes deeply skilled at a component of a value chain instead of an entire value chain. By contrast the deep specialist of non mass-production economies is the guild craftsperson. A weaver or blacksmith is a complete value chain in one person. They can be deeply specialized (for example, specializing in a very particular kind of local weave or exclusively in swordsmithy), but the point is, no matter how specialized they get, they are independent value chains that can convert raw materials into something tradeable for cash. By contrast, a highly skilled welder (among the few remaining high-paid specialist shop-floor jobs) is not capable of independent production.

This actually means your idea is even broader than you state. It is not only mass-economy specialists who are vulnerable to suddenly changing times. Guild-economy craftsmen are also similarly vulnerable. I believe there have been such busts in trades like masonry, paper-making etc., but I can't recall details off the top of my head.

To relate this to the James Scott's concept of legibility, one way of understanding what Taylor did in achieving the scaling-based winner-take-all economy (driven fundamentally by experience curves) is as follows. The skills of production used to be illegibly inside the heads of master craftsmen, to be transmitted only through master-apprentice relationships, usually within secretive guilds.

When Taylor stepped in, he made these skills both legible (by deconstructing work, taking inspiration from Adam Smith's prototypical example of the nail factory) AND centralized the legible knowledge in the minds of managers, leaving in the workers minds only the specialist skills that cannot be used in stand-alone ways independent of the factor. So the actual production could take place without craftsmen, and have the specialization cake and eat it too.

The result was that while the craftsmen lost both income and skill, a much larger class of mass-production workers who'd been locked out of the economy in marginal subsistence roles suddenly had access to much greater income. Remember that despite the tedium, Taylor and Ford paid their crank-widget employees extremely well. Despite the high pay, farm/guild style workers loved their independent lifestyles and hated the factory model, and it only took off because of smart timing by the early capitalists (for example, the textile industry in Britain took off when a bad harvest or two forced farmers into factories, after which it was a simple matter of one generation of industrial-style schooling of their kids to create an inexhaustible supply of factory workers).

So I think the income inequality picture is slightly more complex. It happened not through general depression of income at the bottom/inflation at the top, but through the hollowing out of the old middle class (the guilds), who then had to either climb up or down.

This logic was then applied to information work, further disrupting the guild-structure in information work domains like book-keeping, typesetting (at one time, printers were among the most powerful guild industries), etc.

But again, both in blue and white collar, this wasn't the true start of the disparity trend. As with manufacturing, the systematization of office work/white collar work initially led to rising incomes (especially for women, who broke into information work first as typists).

The trend really started when industrial automation (robotics/CNC machines etc.) started pushing the blue collar class into the burger-flipping class. In a way this was a bait and switch. They got higher wages when they were useful in destroying the skilled guilds. But once the guilds were destroyed and automation was available, they got kicked back to their 1890s income levels.

Computers did the same thing to the white-collar class.

Re: A loose assortment of thoughts

Venkat — Sun, 01 May 2011 17:18:33 -0000

Interesting musings Kyle. I agree... unresolvable dichotomies are usually endlessly fertile.

Mind posting a short review/comment on the Tempo reader reactions page?

So what's next after the startup?

Re: Understanding Attention Scarcity – Why The Attention Economy Belongs to Peers, Not Brands

Venkat — Sat, 30 Apr 2011 18:59:33 -0000

As far as examples go, I've heard of great software teams trying to hire themselves out as a unit. Then of course there are the companies that get acquired for the team.

I think there is a fundamental biological analogy... I believe it is called co-selection. When gene A and gene B together confer a fitness advantage, but each present without the other is of low value.

Re: Understanding Attention Scarcity – Why The Attention Economy Belongs to Peers, Not Brands

Venkat — Thu, 28 Apr 2011 22:04:30 -0000

Their collective attention created Google! Think dream team, not committee. Point is to create valuation of 'chemistry' effects. Sum greater than parts. Of course negative chemistry teams also exist: sum less than parts.

Re: Understanding Attention Scarcity – Why The Attention Economy Belongs to Peers, Not Brands

Venkat — Thu, 28 Apr 2011 20:17:26 -0000

To relate this to an angle I explored in the Crucible post, collective attention, how can we currencify the idea that (say) attention from Brin and Page together is more valuable than from either separately?

Re: Alternative Currency, YCombinator and the Creative Knowledge Worker

Venkat — Tue, 12 Apr 2011 12:44:25 -0000

I don't recall what I said about the 150 (I calibrated that against Dunbar's number basically), but I now think of them as not necessarily hard currency customers but as people who end up supporting your real-life costs in direct or indirect ways, cash only being one of them. Others I've found to be very important include leads/referrals for paying gigs, collaboration opportunities (in the sense of what John Hagel calls a "pull network") for when you need partners to go after an opportunity too big to take down by yourself etc.

I also think now that the medium and price structure can be a lot more varied. A blog partitions things the way I described (as does Y-combinator, perhaps). But a book for instance carves up the market very differently... you ARE making money off more than 150 (literally, I've sold over 180 copies of my book so far, and I'd estimate that only about 50 of them are in my core 150 for ribbonfarm, so that's about 130 who I'd consider $0 types from the blog viewpoint).

But this virtual currency angle is fascinating. I've been groping my way towards that theme as well, pursuing the thought that there are high real-world value transaction spaces that do not use cash instruments at all, except as gatekeeping with respect to the cash world. For example, an airline first class lounge gatekeeps with cash, but once inside, you get all the basics like coffee, internet, snacks and alcohol for "free."

The "cash" way of thinking about it is that the price is build into the price of a first class ticket etc., but while true, that's an irrelevant point. I think the real reason such systems work is that they raise the economic game by creating a space where things like coffee aren't even worth the transaction costs to pay for. That's why we get the paradoxical effect that very rich people get a lot more free stuff than middle class people. You and I may complain that they can afford to pay, but the point is, making a lot of the high-volume cash economy free inside a "rich people firewall" allows the rich people to freely wheel-and-deal at million and billion dollar levels, where money behaves very differently.

I haven't yet fully figured this stuff out, but there's something very important here around money/currencies.

Re: Do you Have What it Takes to be a Strategist?

Venkat — Thu, 03 Feb 2011 16:45:47 -0000

Thanks Dan; I think this is one of your best posts. Succinct and pointed. And I am not just saying that because you cited me :) I especially like your characterization of the “rah rah rah rah rah get moving!” school of business blogging.

Re: A Few of My Least Favorite Things

Venkat — Thu, 06 Jan 2011 14:01:59 -0000

This is very clever. I share many of these 'least favorite' things.

Re: The MBA Mondays Curriculum

Venkat — Mon, 03 Jan 2011 08:25:24 -0000

Fred:

I would REALLY like to see the material turned into a textbook.

A book is more than a format, it is a form. I don't care about what medium you use, but if you can somehow manage to set the time aside to actually string a book-style narrative through your series of posts (perhaps with the help of a ghost or co-author) I think the value of the material will increase 10x. It is that appreciation of the asset that I'd like to see, rather than nominal porting into a different medium.

It doesn't matter what technology you then youse to disseminate the material. The point is, a long-form narrative is a different beast than a collection of blog posts. I'd like to see that transformation.

Venkat

Re: Emotions — REVEALED!

Venkat — Wed, 29 Dec 2010 11:47:48 -0000

Definitely keep blogging. You're developing a good voice here. You know where to find me if you want to chat more :)