Human Potential

The flip side of the “robots eat all the jobs” theory not being discussed: The current revolution in the “means of production” going to everyone in the form of the smartphone (and tablet and PC) + mobile broadband + the Internet: Will be in almost everyone’s hands by 2020. Then everyone gets access to unlimited information, communication, education, access to markets, participate in global market economy.

This is not a world we have ever lived in: Historically most people in most places cut off from these things, usually to a high degree. It is hard to believe that the result will not be a widespread global unleashing of creativity, productivity, and human potential. It is hard to believe that people will get these capabilities and then come up with absolutely nothing useful to do with them.

And yet that is the subtext to the “this time is different” argument that there won’t be new ideas, fields, industries, businesses, jobs. In arguing this with an economist friend, the response was “But most people are like horses; they have only their manual labor to offer.” I don’t believe that, and I don’t want to live in a world in which that’s the case. I think people everywhere have far more potential.

Source: Tweets – 1,2,3,4,5,6,7,8,9

Responses:

Why Doing What You Love Is Destructive Career Advice

Thesis: “Do what you love” / “Follow your passion” is dangerous and destructive career advice.

We tend to hear it from highly successful people who have become successful doing what they love. The problem is that we do NOT hear from people who have failed to become successful by doing what they love. It’s a particularly pernicious problem in tournament-style fields with a few big winners and lots of losers: media, athletics, startups.

Better career advice may be “Do what contributes” — focus on the beneficial value created for other people versus just one’s own ego. People who contribute the most are often the most satisfied with what they do and in fields with high renumeration, make the most money.

Perhaps difficult advice since it requires focus on others versus oneself. Perhaps a bad fit with endemic narcissism in modern culture? It requires delayed gratification and may toil for many years to get the payoff of contributing value to the world, versus short-term happiness.

Source Tweets: 1,2,3,4,5,6,7,8

Theories on Valuing Companies

The conventional view of how to value companies:

(1) Analyze the company + its financials + future cash flows;
(2) Calculate the correct valuation.

What actually happens:

(1) Observe current market valuation;
(2) Construct theory and model to explain that valuation.

In this way, George Soros’s theory of reflexivity is exactly correct. Fundamentals influence prices which influence fundamentals which influence prices which influence fundamentals… ad infinitum.

At the cyclical top, high prices drive creation of theories to explain infinite future glory; negative investors and analysts get fired. At cyclical bottom, low prices drive creation of theories to explain permanent future misery; positive investors and analysts get fired.

Therefore, a boom in theories of how everything’s a bubble and certain to crash is evidence of a cyclical bottom, not a cyclical top. Therefore, Efficient Market Hypothesis is correct if for “all information” you substitute “all information, theories, noise, and bullsh*t”. Since we are social animals, the challenge of actually standing outside of the herd is brutally hard. Pressure to conform is constant/intense.

Further Reading:

Famous paper well worth reading: “The Limits of Arbitrage

Another famous paper well worth reading: “Noise” by the great Fischer Black

Source:
Tweets – 1,2,3,4,5,6,7,8,9,10,11

Responses:

Thought Experiment

Potential gap” equals delta between every person in the world fulfilling full potential in whatever way most suited, vs. today. Think about if every person had access to education, training, nutrition, health care and has the full ability to make maximum contribution in their chosen field.

No coercion. In fact, the opposite to excel at whatever one feels more suited to do. Science, tech, arts, teaching, business, etc. What’s the best way to measure “potential gap” delta in metrics like economic growth, standard of living, rate of advance of science and arts?

These are the stakes we are playing for. This is the big opportunity for the future. This matters more than almost anything else. This is why I reject claims today’s tech industry is not tackling big problems. This is the biggest problem. We are trying to tackle it head on.

How many people on the planet today are in position now to be able to fulfill full potential in chosen fields?

What are the big advances in tech, business, education, health care, other areas, most needed for the next 10, 20, or 30 years?

Bear in mind the great lesson of civilization: Higher economic growth equals more cash available for non-financial-incented activities. So 10-100 times current economy equals at least 10-100 times current funding for nonprofits, arts, social safety net, and everything else we want.

Source: Tweets 1,2,3,4,5,6,7,8,9,10

Exponential Decay Curve

Dittoheads

photo credit: Jezlyn26cc

It is so interesting to tweet on the NSA/Snowden affair and disagree with Glenn Greenwald’s ideological positions even a little bit. If he picks it up and retweets it, there’s immediately this massive flying squirrel onslaught tweet attack by hundreds of his followers. Very few of whom have original thought but lots of curse words, ad hominem attacks, and spelling and grammar mistakes. Attack tweet volume follows perfect exponential decay curve, unless Glenn fires them up again, then starts over.

This does not happen for any public Twitter figure or any other topic that I have seen. It is specific to Glenn and his cult following. But it kept nagging at me, I’ve seen this before, and then I figured it out. Rush Limbaugh and his dittoheads! The inescapable conclusion is clear: Glenn Greenwald is Rush Limbaugh for our time. Strap in, it’s going to be quite a ride.

Source: Tweets – 1,2,3,4,5,6,7,8,9,10

Red Queen Hypothesis

Organisms adapt/evolve not only to gain advantage, also to survive vs evolving opposing organisms in changing context. – Red Queen Hypothesis

In many populations, the probability of extinction does not depend on the lifetime of the population. In addition, the probability of extinction is constant over millions of years for a given population. An adaptation of one species may change the selection pressure on another species, giving rise to an antagonistic co-evolution.

Rough Skinned Newt

Rough Skinned Newt

The metaphor of an evolutionary arms race — the description of biological processes with dynamics similar to arms races. The ability of a family of organisms to survive does not improve over time — surprising lack of correlation between age and extinction.

Citation for biological extinction is Leigh Van Valen, 1973.

The Allee Effect On Startups

photo credit: Simon Blackley - cc

photo credit: Simon Blackleycc

The Allee effect is a biological phenomenon that shows a positive correlation between population size/density and mean individual fitness within population.

Allee’s experiments demonstrated that goldfish grow more rapidly when there are more individuals within the tank.
Classical view: Due to competition for resources, population has a lower growth rate at a higher density and a higher growth rate at lower density.

The Allee effect indicates positive density dependence as well as a positive correlation between population density and individual fitness, resulting in “undercrowding.”

Is there a corollary in startups? Does the number of tech startups targeting an established industry mean higher odds of success for each? Even if they are competing for scarce capital/talent, will they make each other more competitive by sharing a playbook against a common enemy?

It would seem that the Allee effect for startups is deeply counterintuitive and directly opposed to Thiel/Musk theory of “one startup can monopolize the talent.”

Source: Andreessen’s tweets on the Allee effect and startups: 1, 2, 3, 4, 5, 6, 7, 8