An evening of insights with the Hutters

The idea route for a startup is to deploy a small skeleton crew to focus on mining for the insights on human behavior with cheap experiments that will support a viable business model before raising money and scaling up the operations.

Big organizations tend to forget the insights that original lead to the founding of the company

If there is a company out there that is solving a problem you are trying to find a solution for but you cannot think of it off the top of your head, they might as well have been dead.

What you think might work usually is not so. It is only when you land up in a promising domain and start mining for insights in that domain do you start finding ones that are useful for building a company from.

Screenwriting is probably the only occupation where you can envision how all the moving pieces fits together while you are lying in bed. Writing a business plan is a very useless undertaking because unless you have tested your business model to get actual market response, you will not know if it would work or not work. This is much of other inductive processes where much of the building blocks required to work are out there in the environment yet know and to be discovered.

Humans are motivated beyond pain and pleasure

No one has considered hyperlinks themselves as important data elements.

It is usually the simplest actions backed by the most fundamental insights that drives the largest consumer adoption.

People feel that sense of accomplishment when they gather stuff thanks to our hunter gathering roots . They might not even need it at the end of the day.

Social book marking just died when most of their operators pivoted away from the central idea in 2005

  • Stumble upon
  • Digg
  • Reddit
  • Pintrest
  • Trello

The mass adoption of Slack and Quip might be a great channel for growing such an idea again but for the enterprise space.

The success of YouTube can be speculated to be due to:

  • In baked flash media code into browsers
  • Increase in bandwidth
  • Delaying the payment of royalty fees and taking down of copyrighted contents
  • They got sold for 1.2billion but paid of 750million in terms of royalties

Mark Cuban is a fake billionaire for selling Real networks to AOL which eventually got shut down after six months. Reason for Real Network being empty is because while it looking really impressive on the outside, it did not capture any of the user behaviors.

Related readings

  • Tory Higgins, “Beyond Pleasure and Pain: How Motivation Works”
  • Tory Higgins, “Shared Reality”

Paid acquisition strategy review

The way MasterClass, Apple and SquareSpace execute their paid acquisition strategy is just a cut above the rest. The advertisement are inherent viral.

SquareSpace – John Malkovich Super Bowl 2016
https://youtu.be/LgQB9cIa0DE
SquareSpace – Jeff Bridges super bowl 2015

Apple: Think different 2013
https://youtu.be/5sMBhDv4sik

Apple: 1984 big brother
https://youtu.be/VtvjbmoDx-I

MasterClass – Hans Zimmer
https://youtu.be/yCX1Ze3OcKo

Advise from Casey Winters on SEO metric tracking for startups

For startups utilizing SEO as a acquisition model to focus on the following:

  • Utilize this formula to track performance: for all keywords ranked ( Ranking of site for keyword + Monthly Search volume of keyword )
  • User perceived wait time
  • Conversion rates from visits to registration

In a nutshell, to rank for more keywords via pages created instead of trying to optimize for specific keywords.

The Teachings of Don Juan: A Yaqui way of life

Shamanic world view

The practitioner of the shamanic tradition at once sees the world as it is as well as a manifestation of infinite energy that is is constant flux.

The sequence of four enemies a knowledge seeker must inevitably face

  • Fear: The fear of uncertainty and the unknown is the first enemy a knowledge seeker must face. As he progresses along his journey, he will be faced with fear over an over again. The work is to face the fear and keep moving forward in the question for knowledge. With time, this fear will dissipate and he will get clarity
  • Clarity: Clarity is a subtle enemy. Succumbing to this enemy means the inability to decipher real clarity from one’s egotistical illusion. The work is to constantly question the perceive clarity while moving forward in the quest for knowledge. With time comes true clarity which brings with it a lot of power
  • Power: Power is a very seductive enemy. With great power comes the temptation to abuse this power. Succumbing to this enemy brings around rampant destruction due to abusive use of power. The work is to constantly keep power in check while continuing the pursuit and application of knowledge. With time, comes the final enemy, old age.
  • Old age: Is an enemy that can only be conquered temporarily. The work is to constantly fight the desire to lie and rest. Yielding to this enemy will result in no further pursuit and application of the knowledge acquired.

Noteworthy plants

  • Jimson weed: Psychedelic to help you relive and see your past memories
  • Peyote: Another plant to aid in the communion with the spirits
  • Mescalito: Hallucinogenic drug made from the flowering heads of cactus

Observations at the heart of Permian basin

Office for the day. A proxy of view into the heart of the Permian basin as I get my car wheels aligned

The level of auto traffic along the Cedar Street, Pecos Texas is a very clear proxy on the health status of the US Oil industry.

Factors negatively impacting economic activities in the area:

  • US Elections: Oil companies operating in area put activities on hold awaiting for forthcoming mandate
  • Holidays: Demand for oil drops
  • COVID pandemic: Demand for oil drops

Responsiveness of lagging indicators:

  • Lag time between events and lagging indicators within the region is typically 24 hours
  • Layoffs can happen within 24 hours of environment triggers
  • Rapid hiring can happen within 24 hours of environment trigger
  • On occasions, rapid hiring and layoffs could happen simultaneously in different sectors

Qualitative background:

On mornings during times of Economic boom in the Oil industry, the Pilot center across the street could be observe lined with trucks rushing to fuel up as they go about transporting out their cargo to their destinations.

On such days, the empty parking lot in front of Custom Mufflers Tire Repair center could be seen filled up with trucks getting their wheels serviced.

With the election of President Biden, a bill was past that totally stopped all oil and gas related activities in New Mexico. This has resulted in the damping of traffic heading north along Cedar Street for the foreseeable future.

 

Observed second and third order impact of GameStop frenzy on market stability

Investment Funds market exposure strategies can be categorized primarily into three types.

Type 1: Long only strategy: funds that buy and hold positions.

Type 2: Short only strategy: funds that primarily borrow and short shares

Type 3: Market neutral strategy: funds that hold half their position in long and half their positions in short attempting to gain from some form of arbitrage between performers and losers.

To increase profit funds would typically be leveraged. Levels of leverage is dependent on how aggressive each individual fund is. Long Term Capital Management for example, a fund that went bankrupt in 1998, was leveraged up to 20X for some of its positions.

During a recent frenzy co-ordinated efforts by Redditers bid up prices of stock symbols like GameStop and AMC. From a fund management perspective, funds belonging to Type 2 and Type 3 were heavily impacted by this black swan event. As losses in their short positions mounted, many received margin calls from their lenders.

It is likely that Type 3 unwinded the bulk of their long positions to cover their margin calls. This had the net impact of driving down share prices of other unrelated stock symbols as observed in the US Equities sell off chart above.

Depressed share prices due to the unwinding of long positions by Type 3 lead to a follow on cascading effect where Type 1 had to unwind their leveraged long position.

This large scale unwinding activity could be inferred from the inverted yield curve observed on 31st Jan 2021. This inversion could also be interpreted as funds opting to maintain liquidity levels by moving heavily into positions like short term US Treasury and cash as they await for the market gyration to settle.

The last time the yield curve was observed to be extremely inverted was on 26th Feb 2020, during the initial onset of the COVID-19, pandemic as illustrated below

That was rectified when the Federal reserve lowered interest rates to 0% and started quantitative easing on 13th March 2020.

Permain basis observations

American frontier society principles and worldview

  • Trump is the best president that God has given to America
  • God’s deeds are done in actions not words
  • If you do not appreciate what God has given, it was be taken away and replaced with something not as good
  • God created put the government in place to maintain law and order
  • Your purpose is to become the best possible version of yourself in service to God
  • What you can do you keep. This is how you keep cash in the business
  • Observe the actions not the words. When you follow your line of reasoning from actions that actually happened, the outcome of your thought process must be true
  • Apply the principles of auto-suggestion. People will more readily to respond to your actions than your words. Never use it for evil. Examples:
    • stand by the road on the highway holding an empty tank and chances are someone would stop by and offer you a ride to get gas
    • setup a table properly with all the meal and bring out a container showing empty butter and the guest will likely volunteer to go get butter

Economic environment in Permian basin

  • Permian basin is the heart of America’s oil supply. It has gone through multiple cycles of boom and bust over the past 20 years. Each bust cycle typically last for a year.
  • Property valuation. and taxes
    • before 2018
      • Valuation USD150,000
      • Taxation US1500
    • 2018
      • Valuation USD4,000,000
      • Taxation USD40000
  • Boom years
    • Total revenue for Roper motel was above USD1,000,000 during 2018 when demand for oil was strong.
    • Property taxes is calculated based on property valuation. Property valuation is assess every year.
    • Government started including motel furniture installations as part of annual property taxes as it was considered capitalized expenditure used for the purpose of generating revenue
    • Water taxes increased as usage was categorized as commercial leading to a doubling of water bills
    • Motels are charged USD200 a month for ambulance service in town
  • Post COVID era
    • while taxes were increased during the boom years, downwards adjustments were slow. Pecos is ailing for heightened level of taxes and low oil demand

Social environment in the Permian Basin

Reflections on navigating inflection points

Sometimes there comes an inflection point where you have to make a great leap of faith.

I can still remember that morning back in 2008, when I woke up in Shymkent, Khazakastan. I was feeling undecided about taking up Bernhard and Franzikas’ offer the night before to go visit them in Europe or just turning around and heading back home to Singapore overland. I was down to just USD3,000 in my bank account at that point. Shymkent was about the half way mark if you were planning to travel overland from Asia to Europe.

Sitting in the cafe sipping my coffee, I saw then the only other backpacker I have seen during this entire period, other than the pack I was with, walking through the door.

I soon realized after a quick chat he was heading in the direction of Asia overland. He had maps for territories westwards and I for those eastwards. After brief moment of deliberation I exchanged maps with him.

2008 was a period before smart phones and Google maps existed, giving up the map eastwards was like shutting the door to retreat back to Asia if I decided at any point to abort. You could imagine how frightening that experience was.

24 hours later in Astana, I saw broadcast over the news that severe riots had finally broke out after months of tension in the western region of China. The path back eastwards overland was closed and nailed shut. I guess I had no choice but to fully committed at that point. Strangely, with total clarity of purpose brought about a profound sense of calm.

Three months later after experiencing an actual deport, crashing at a few friends’ place and sleeping in the streets on multiple occasions I arrived in London UK, accomplishing my overland trip from Asia to Europe. And it was at the height of the 2008 financial crisis… Oh boy…

And that was definitely not the only inflection point I have experienced. In hindsight, inflection points tends to force you to either fully and totally commit to whatever your pursuits are or give up. The process catalyzes a one way change. It require a great deal of faith. Successful navigation of such events brings along with it total clarity of purpose until the next inflection point.

I guess part of the reason I founded GetData.IO was to provide people with a simple and affordable way to get the data they need so as to navigate those inflection points that life inevitably throw at them.  To help them make that decision they know they need to make and to have that peace of mind when the decision is finally made.

Observations of a trucker from the trucking community

  • Beliefs and behavioral profile
    • doesn’t believe in paying for an apartment
    • strong desire to be free
    • lives out of his truck
      • has bed
      • microwave
      • heater
      • storage
    • stopped over at truck stops when he used up his daily miles
    • gets to shower for free at pilot truck stops because of the amount of fuel he purchases
    • World view
      • References EpochTimes as a news source. Distrust CNN
      • Trump supporter – sees him as the only president that is not drawing a salary for his work.
      • Believes Democrats want to turn the country socialist by controlling the media and its messaging hence concludes the media is rigged
      • Further believes Democrats want to ban guns so as to exert more control over its people like a policed state
      • Believes in the ownership of guns to as a means to counter balance the power of the state to prevent involuntary drafting likes those imposed upon the people by the Confederates during the American civil war
  • Truck stops
    • Pilot Travel center
      • sells a lot of the equipment needed by truckers
      • showering facilities
      • internet and resting facilities
  • Technology usage:
    • Truckers have their own social network which is ran on Garmin.com
    • they text each other using the app
    • the app also tracks where they drove
  • Federal Law restrictions
    • Truckers hour limits by
      • 70 hours of driving per week
      • 11 hours of driving per day
      • 14 hours of working time per day which includes loading time
    • Yearly health checkup is required to operate a truck
    • Speed and alignments during operations after actively monitored by the Federal government through an onboard Qualcomm system
  • Technical details
    • A typical truck runs at 7.7 miles per galleon
    • weight
      • back axles 18000 pounds
      • front axles 18000 pounds
      • fully loaded truck 80,000 pounds
    • 3 separate braking system
      • regular brakes using air
      • parking brakes
      • emergency brakes  which will damage the axles if used abruptly
  • Trucking economic
    • A brand new trucks cost around USD150,000
      • Truckers can enter into a lease to own agreement with the trucking company to eventually own their truck.
        • typical monthly installment is around USD500 to USD1,000
        • installment payment accrues based on miles driven USD0.15/mile
        • a truck which has accrued 300,000 miles will sell for USD50,000. Value of the truck is depreciated at USD0.33/mile
    • operating profit and loss
      • Trucking contract typically paid revenue of approximately USD2/mile
      • Gross margin from a truckers point of view for an assignment is around 50%
      • net profit should be around 25% of that
      • Example:
        • Long haul job for 500 miles
          • revenue USD1000
          • variable expenses USD 500
            • gasoline
            • tolls
            • loading fees
            • etc
            • trucking company dues
          • amortized fixed monthly expenses USD 250
            • insurance
    • assignment details
      • when operating with truck leased from company, assignments are provided by company. Company takes 50% cut in exchange
      • if own truck, can take assignment from a trucking company which has cargo to be hauled
      • can opt to generate lead to assemble own cargo to be hauled.