An Open Letter to Barnes and Noble
I got mad after just completing a purchase with Barnes & Noble. Seriously? They expect to compete with Amazon in the online game? Amazon at least takes security seriously. That’s the very basics of competing online: customers must trust you with their credit cards. Anyway, here’s the rant I sent them:
I’d like to express my gross dissatisfaction with your association with WebLoyalty, Inc.
I noticed it recently when completing a purchase. You certainly know that most of your customers don’t gain any value in the services offered by WebLoyalty. In effect, it’s a scam that they will try to get out of in the near future. Most of your customers will be surprised that they unwittingly gave their credit card information to WebLoyalty through your web site.
If you want to beat Amazon and your other online competitors, customers need to trust your web site. They cannot do so when you present links to sites such as WebLoyalty that are notoriously nefarious [1][2].
[1] http://www.grc.com/sn/sn-207.htm
[2] http://www.consumerwebwatch.org/dynamic/ecommerce-investigation-webloyalty.cfm
Epicurus: a pre-cursor to positive psychology?
I’m partway through the book The Consolations of Philosophy by Alain de Botton
- Wealth does not necessarily mean happiness. (In fact, relishing simple indulgences tends to make one happier than acquiring a sophisticated taste.)
- In order to be happy, you should surround yourself with friends.
This reads straight out of Seligman’s Authentic Happiness
A conversation with Lowell Bryan and Richard Rumelt – McKinsey Quarterly – Strategy – Strategic Thinking
Enjoyed the McKinsley Quarterly podcast A conversation with Lowell Bryan and Richard Rumelt – McKinsey Quarterly – Strategy – Strategic Thinking (link is to transcript of the interview).
They make the point that we were all looking at the wrong metrics before the mortgage/credit crisis occurred. Things such as GDP, etc. have no correlation with people making much larger mistakes (packaging high-risk loans as low-risk).
Here’s a really good analogy:
At the heart of this failure is what I call the “smooth sailing” fallacy. Back in the 1930s, the Graf Zeppelin and the Hindenburg were the largest aircraft that had ever flown. The Hindenburg was as big as the Titanic. Together these vehicles had made 620-odd successful flights when one evening the Hindenburg suddenly burst into flames and fell to the ground in New Jersey. That was May 1937.
Years ago, I had the chance to chat with a guy who had actually flown over Europe in the Hindenburg. And he had this wistful memory that it was a wonderful ride. He said, “It seemed so safe. It was smooth, not like the bumpy rides you get in airplanes today.” Well, the ride in the Hindenburg was smooth, until it exploded. And the risk the passengers took wasn’t related to the bumps in the ride or to its smoothness. If you had a modern econometrician on board, no matter how hard he studied those bumps and wiggles in the ride, he wouldn’t have been able to predict the disaster. The fallacy is the idea that you can predict disaster risk by looking at the bumps and wiggles in current results.
The history of bumps and wiggles—and of GDP and prices—didn’t predict economic disaster. When people talk about Six Sigma events or tail risk or Black Swan, they’re showing that they don’t really get it. What happened to the Hindenburg that night was not a surprisingly large bump. It was a design flaw.
This theory of large disasters makes a lot of sense to me: it almost seems like a necessary condition for a large disaster that the conventional metrics wouldn’t predict it. We’re not all stupid; if some metric predicted disaster, someone would take advantage of it–and in free markets, each opportunistic person forms a feedback loop that corrects the original market inefficiency (in this case, averts disaster by gradually devaluing mortgage-backed securities).
The interviewees go on to say that the systematic design flaw was treating correlated securities as having independent risk. That seems like a contradiction to me: aren’t things such as correlations and risk well-established metrics? So, weren’t the metrics available at the time able to predict this disaster?
According to the interviewees, these metrics weren’t being analyzed within the scope of economic stability. Instead, GDP (and GDP volatility) was being tracked. I don’t know enough to know whether they are right or wrong. But, it makes for thought-provoking reading.
Outliers by Malcom Gladwell: a review and reflection
I finished the book Outliers by Malcom Gladwell
The premise of the book is that we tend to credit outstanding performers (“outliers”) with outstanding skill. While Gladwell does acknowledge that all outliers do have top-notch ability, he makes the case that ability is not enough: there also needs to be some external situation that enable this ability to jettison a person to the upper rungs of performance. Since many people have ability, but few people have favorable circumstance, we should really credit the circumstance with the generation of peak performance.
The book is not science in the true sense of the term: There are no controlled experiments to show that ability is a weaker predictor of success than is circumstance. However, one could argue that such a controlled experiment is impossible: you can’t hold all other things equal—and Gladwell has come pretty close to performing the experiment (retrospectively) by considering both people with great talent and great circumstance that accelerate to the pinnacle of their field, and people that have great talent but not circumstance. The best we can say is that Gladwell is a journalist and he has gone beyond the 3-example rule to give evidence of his hypothesis. However, he has not scientifically proven it. A larger (statistically valid) study could prove it.
That said, his description of how things happen rings true with me. I can’t say that I’m at the pinnacle of my field. (Lately, I can’t even define the field.) However, I did benefit from some good circumstances in my life:
- When I was in the 5th (?) grade, my dad brought home an HP computer from work. I quickly began programming in BASIC and plotting sinusoids. I learned a lot about both math and programming from the experience. My parents continued to buy computers: I started programming on Windows 3.1 when I was in 7th/8th grade.
- After I finished the 6th grade, my parents moved us to the US. This was a designed shift in circumstance. My parents wanted my sister and I go to high school and college in America. They worked very hard to get us here.
- Going to University of Illinois, I met someone who would later be a partner at Infinium. That certainly helped get me in the door at Infinium.
In addition, it’s clear to me that Infinium itself illustrates the sort of paradigm shift that Gladwell talks about in the book: the founders of Infinium predicted that things would go digital and be software-driven—and that one could then do automated trading.
The chapter on the Canadian hockey teams also reinforces a principal I’ve learned over the years: coaching is for everyone, not just for your good players. I think in corporate environments, there’s an over-emphasis on differentiating talent. That differentiation is good. However, it tends to get confused with where managers spend their time. That’s a shame; as the book shows, structures that seem to be meritocracies can be fatally flawed.
I thoroughly enjoyed this book
Radiohead: Let Down
[mp3 keywords=”Let Down OK Computer Radiohead” title=”Radiohead: Let Down”]
This has remained in my top-ten favorite songs for almost a decade.
Cognitive Dissonance Mashup: David Allen (GTD), Gary Marcus (Kluge), Martin Seligman (Authentic Happiness)
I really like David Allen’s Getting Things Done. While he discusses long-term (50,000-foot) goals, he focuses on the near-term panic-causing stressors of an over-demanding life first. Someone who is just plain stressed out isn’t going to start thinking about their life vision. He clearly understands the needs of and stresses on the human brain. This (at least in my lay opinion) is the power of cognitive behavioral therapy as opposed to psychoanalysis: who cares about what happened years ago if you’re just nervous/sad/pissed about what is happening now.
Labor Market Making
Executive Summary
in the same way that a commodities market maker ensures liquidity in a market and reduces the chaos that might be caused by low participation in a market, is there a way to formulate a labor market maker? Can this same concept be applied to the labor market?
Networking: Whom, When, How?
Introduction
What happened to making acquaintances? It seems like this sour economy has employment on everyone’s mind, and it seems to be impeding the formation of true peer relationships. I’ve caught myself in this regard. Here’s an example: Read the rest of this entry »
Assumptions vs Accomplishments
I’ve been lucky enough to find myself in a team that’s intent on finding the best circuit design for a given application. This doesn’t happen often to many people, but I feel that I’ve had more than my share of this opportunity.
The conclusion is usually that we come up with some topology (let’s call it circuit X) that optimizes all the performance criteria. I walk away wanting to generalize the experience with the lesson that circuit X is the best circuit ever, and I want to use it everywhere.
Inevitably, I find that some other topology Y is better suited for some other application. There were some specific constraints or conditions on circuit X that don’t apply to circuit Y, and as a result, circuit Y is more optimal for application Y.
Looking back on this behavior, I think the main fault is the tendency to remember only the conclusions and not the assumptions. Why do we* do this? Well, because the assumptions are where we start. The lesson learned is where we end. We’d rather remember the finish line—the victory—rather than the starting line. It’s certainly more glorifying to remember your accomplishments rather than the mundane criteria that drive us to the goal. We are also rewarded for the results, not the specification of the problem.
I’ve periodically re-learned this tendency to form generalizations by forgetting assumptions and by only remembering the conclusion of the thought process.
footnotes
* Maybe I should say I, not we: perhaps I am generalizing again.
What Makes Us Happy? – The Atlantic June 2009
Interesting (albeit long) article on a very large psychological study spanning many years:
As Freud was displaced by biological psychiatry and cognitive psychology—and the massive data sets and double-blind trials that became the industry standard—Vaillant’s work risked obsolescence. But in the late 1990s, a tide called “positive psychology” came in, and lifted his boat. Driven by a savvy, brilliant psychologist at the University of Pennsylvania named Martin Seligman, the movement to create a scientific study of the good life has spread wildly through academia and popular culture dozens of books, a cover story in Time, attention from Oprah, etc..
Vaillant became a kind of godfather to the field, and a champion of its message that psychology can improve ordinary lives, not just treat disease. But in many ways, his role in the movement is as provocateur. Last October, I watched him give a lecture to Seligman’s graduate students on the power of positive emotions—awe, love, compassion, gratitude, forgiveness, joy, hope, and trust or faith. “The happiness books say, ‘Try happiness. You’ll like it a lot more than misery’—which is perfectly true,” he told them. But why, he asked, do people tell psychologists they’d cross the street to avoid someone who had given them a compliment the previous day?