Category: Novel Concepts and Interesting Research

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BR 196: The Signal and the Noise by Nate Silver

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Comments: I think I might have called this a “Priority 1” book if it wasn’t for business school. This was a very good refresher on how to think about predictions and data. As the ultimate data geek, Nate Silver does a very good job introducing us to the world of prediction and statistics.

Top 3 learnings:

1. Sometimes, predictions change the nature of the thing. If everyone is using an app that predicts highway x will have lesser traffic, everyone could end up on highway x.

2. Bayesian approach was to make a small prediction and keep improving on it. Probability was seen by Laplace and Bayes  as a step toward progress. Bayes theorem is concerned with conditional probability. Think probabilistically. Require you to accept that your subjective representations of the world are not truth.

3. Terrorist attacks are similar to earthquakes – high uncertainty. However, when you plot frequency and destruction wrought by terrorist attacks on a double logarithmic scale, it is a straight line!

The broken windows theory was embraced in the US despite limited scientific evidence perhaps because it is easier for police to imprison a 16 year old with drugs than solve a difficult crime.

Israel has taken the opposite approach – it treats small acts of terror as normal but has worked hard to eliminate large threats. Israel’s power law distribution curve looks different from what you might expect – due to their strategic choices.

Book notes here.

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BR 193: The Accidental Superpower by Peter Zheihan

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The accidental superpower, peter zheihan

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Comments: This is a very powerful book. It is the sort of book that completely changes how you see the world. For example, I doubt I’ll ever look at a map of the world the same way again. It is also unlikely I’ll easily buy a story about how a country became a superpower. In this book, Peter Zheihan does a terrific job explaining why the world is the way it is from a geopolitics perspective. He, then, attempts to predict the future. You may not agree with his predictions. But, they are still worth listening to as they will likely help shape yours. In my case, I thought a lot of it was very prescient. I wish he’d been a bit more forthcoming about how we expected technology to change his assumptions though.

Top 3 Learnings:

1. Geography is the primary reason superpowers become superpowers. Typically, it is some combination of access to arable land, presence of internal waterways, and a location that isn’t easy to access that makes places superpowers.

2. Demographics are an important driver of economic growth. Kids and retirees drain economic resources. On the other hand, young adults make it consumption driven. And, older adults infuse a lot of capital. Thus, the majority group in the population drives the sort of activity in the economy.

3. The last few decades have witnessed unprecedented peace. That’s a result of an unusual move by “the accidental superpower” – the United States – to govern the world via free trade. However, this period is ending since the biggest reason for that pact was to keep Russia at bay. Now, with the absence of a cold war and the sheer expense to maintain this pact, it is perhaps only a matter of time before we see this pact (from the meeting at Bretton Woods in 1945) called off.

Book notes here.

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BR 179: David and Goliath by Malcolm Gladwell

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Comments: Malcolm Gladwell is a masterful writer and weaves together many stories into a compelling book that asks us to rethink our traditional ideas of what constitutes an advantage.

Top 3 Learnings:

1. You may be better off being a big fish in a small pond. More people get discouraged and depressed being average at a top institution.

2. David and Goliath was a mismatched battle. As a slinger, Goliath actually stood no chance.

3. There is such a thing as a desired level of adversity. That’s how character is built.

Book notes here.

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BR 149: Moneyball by Michael Lewis

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Comments: Another Michael Lewis masterpiece. I saw the movie before I read the book. The book was really interesting. Many of the baseball terms and statistics went a bit over the head as I’ve never watched baseball. However, the story and insight were fantastic.

Top 3 Learnings:

1. Value is created when you understand market inefficiencies and exploit them. In the case of baseball, the whole player measurement system was flawed and based on the look of a player rather than statistics that actually contributed to the team. Billy Beane simply went ahead and used these inefficiencies to cause a revolution in the way players were scouted.

2. If you HAVE to do a deal, you are doing to pay too much for it.

3. My favorite insight was Beane’s approach of building a baseball team rather than a collection of players. For example, Beane and his team identified that a play off team needed to score 900 runs to qualify for the play offs (if I remember right). So, they went about building a team that would score the runs together building on each other’s strengths. Focus on the whole, not on the parts. Don’t replace players.. Replace their statistics with one or more players. Top draw insight!

Book notes here.

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BR 128: Free by Chris Anderson

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Comments: Interesting book, especially for those who are interested in the impact of “free” on business and industry.

Top 3 Learnings:

1. The world is moving from scarcity to abundance in most aspects of life. As a result, the structure of the world and business has undergone a fundamental change. A 100 years ago, all the top 100 companies in the world were involved in manufacturing. Now, the percentage is down to 30%.

The moment an industry moves from transmitting atoms (boxes) to bits – free becomes inevitable. So, if the industry is competitive (and we can argue that the Internet has resulted in more competition than ever before), then prices will keep going down till it just covers cost.

2. The important thing for companies is to adapt their business model to incorporate free as an integral part of their model. Free is here to stay.

Examples –

– The popular freemium model wherein businesses give a basic product for free and charge for premium usage

– Microsoft went through the DABDA curve in its reaction to Linux operating systems. While it initially began with the lens of competition, the end result was an acceptance that there is a place for open source in the market. Small companies would rather go open source as its free while big companies would pay money to minimize risk.

– Google’s strategy for information markets – 1) take whatever you are doing, do it for free 2) hook users in and generate scale 3) charge for valuable information Search and Gmail are easy examples. Another such example is Goog-411 – free voice help which is part of Google’s investment into a voice search engine.

– Music – 90% of money is made by bands is in concerts! So digital piracy (or free) helps the band find willing fans

3. The importance of corn – rice, wheat and corn have always been considered the key crops. Rice is high on protein but difficult to grow, wheat is low on protein but easy to grow, and corn is both. Since corn is the most efficient converter of water and sun light into starch, we use corn for more than we can imagine.

More than 25% of the products in a super market are derived from corn. In fact, soaps, shampoos, toothpastes, the boxes they are packed in, and even the compounds that the super markets are built with are  based on corn. A great example of corn power is in a chicken nugget. From the feed of the chicken, to corn oil, to the golden color and smell – nearly every aspect of it is derived from corn.

The big reason corn and food have gotten expensive over the past few years is that corn began being used for the production of ethanol for fuel. This has truly tested the limits of corn.

That was a really cool insight.

(Book notes here)

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BR 124: The Icarus Deception by Seth Godin

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Comments: I really enjoyed “The Icarus Deception.” I am sure this rating comes with a few biases – I am a huge fan of Seth’s work. I love Seth’s blog and I am very appreciative of the fact that he’s taken the time to respond to many of my questions to him and even read and comment on my blog every once a while. He walks his talk.

The Icarus Deception meant a coming together of many interesting concepts for me. His explanation of work we do as “art” resonated as well as many really inspirational learnings on “the infinite game.”

This is not a step-by-step sort of book. Very high level and conceptual. And, very inspiring if you are aligned with Seth’s world view.

Top 3 learnings:

1. “Art is an attitude, culturally driven and available to everyone who chooses to adopt it. Art isn’t something sold in a gallery or performed on a stage. Art is the unique work of a human being, work that touches another. Most painters, it turns out, aren’t artists after all – they are safety seeking copycats.

Art isn’t something that’s made by artists. Artists are people who make art. ”

2. While the differences between work and play are widely documented, the differences between the  “finite” game and the “infinite” game are not.

The finite game theory assumes that life is a series of finite games with winners and losers. There is pressure to be the “one.”

The infinite game theory has a different purpose – the purpose is to help other players play better! It isn’t about winning and losing but about the joy of playing. The wonderful thing about the infinite game is that you avoid the manic highs or lows.. The privilege is in playing.

3. Seth’s advice to his younger self.

“But the one thing I wish I had known then was that whatever happens, things are going to fine in the end, that the pain is part of the journey, and that without the pain there really isn’t a journey worth going on.

No, it doesn’t all work, but you always get to dance. Win or lose, you get to play. I would tell myself not to put so much emotional baggage on every project and every interaction. The goal is to keep playing, not to win.

At the end of a project, the end of the day, and the end of the game, you can look yourself in the mirror and remind yourself that at least you go to dance.”

More on http://www.alearningaday.com/2013/02/on-infinite-game

(The only trouble with sharing Seth’s learnings is that I am forced to quote them. That’s because they are so well written that any paraphrasing makes it less crisp and meaningful. A great example of where I’d like to be as a writer.)

Add on Mar 16, 2016: Seth’s advise to his younger self about  getting rid of what he termed the “manic high” and focusing on playing the infinite game is an idea that has stayed with me.

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BR 121: The Power of Habit by Charles Duhigg

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Comments: Great research put together by an excellent writer. It is the equivalent of a Dan Brown-esque page turner for the psychology genre.

Top 3 Learnings:

1. We are creatures of habit – every one of us – much more than we realize. Habits are the “efficiency” unit of our brains and almost everything we do comes down to the habits we have in place. Luckily, these habits can be shaped and broken. Great people are just by-products of great habits.

2. A habit is a combination of a cue, an routine and a reward. e.g. To form an exercise habit, the cue could be leaving your clothes near your bed, the routine is exercise of course and the reward could be a cup of coffee!

3. There are some habits that are critical – called keystone habits. These are habits that influence almost all other habits. For manufacturing companies like Alcoa, safety was found to be the keystone habit. For humans, it has been found to be exercise.. (this has inspired me to no end to change exercise routines from 2-3 times a week to 5 times a week).

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BR 116: The Honest Truth About Dishonesty by Dan Ariely

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Comments: Another Dan Ariely masterclass with very practical information about cheating. Very useful for us when we define “trust” systems as well as in our lifelong quest to manage ourselves.

Top 3 learnings:

1. Most people, when given a chance, cheat just a little bit. The reason for the “little bit” is that we work hard to stay consistent with our self image of being honest, straightforward people. But, at the same time, we find it hard to resist easy gains when we feel we cannot be found out.

2. Any reminders of ethics and responsibilities completely removes this cheating element e.g. students who were asked to recollect the ten commandments before heading into this experiment did not cheap. Similarly, signing honor codes etc at the start of the document prevent all cheating.

3. Every little act of cheating gives rise to more. In a fascinating set of experiments, it was found that people who fear fake brands or rip offs were more likely to cheat and view the world with a more suspicious lens that people who didn’t. This was a big insight for me.

Essentially, the cost of fakes and illegal downloads goes far beyond reducing profits of the companies involved.

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BR 110: Start with Why by Simon Sinek

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Comments: It hammers home a simple idea and really demonstrates the power of a (simple) framework in making ideas stick. Only downside is that it can occasionally be repetitive – but, maybe, that is the point. :)

Top 3 learnings:

1. Start with Why

2. Start with Why. Then move to the ‘how’ and the ‘what’.

3. Start with Why. Always explain your purpose.

I have been working on implementing this in everything I do. It hasn’t become habitual yet but I’m hoping it will become soon. A simple, really powerful idea.

There are lots of other little lessons from the book that I could list in the top 3 learnings but I fear diluting what I really took away from the book.

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BR 109: Talent is Overrated by Geoff Colvin

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Comments: A very very compelling book built off the research of Anders Ericsson. Must read. Enough said.

Top 3 Learnings: There were many many learnings I took away from the book. Here are the top 3 that come to mind –

1. Deliberate practice is everything. EVERYTHING. Deliberate practice is what differentiates the average from the greats. It’s not just about 10,000 hours. It’s 10,000 hours of deliberate practice that makes the difference.

2. Over time, deliberate practice changes the constitution of our brains. When we look at top performers and say they are ‘different’, we are actually spot on. They are different because their practice has developed that particular part of their brains. So, in short, we are probably born with similar capabilities but the hours we spent developing our craft/ability is what separates us in the long run.

3. It’s all cumulative. Ability accumulates over time. And, there’s no such thing as talent.

4. So how does a kid become a genius? The typical genius starts very early and is egged on by her  parents (not pushed, but egged). As she grows up, she develops the necessary intrinsic motivation that comes from experiencing success. That’s generally the beginning of something very special..

Great book. Must read. Go get it. You won’t regret it.