Differences between decision making and execution

The decision maker and the executor operates with different cognitive models.

The decision maker

The decision maker operates within an environment of incomplete information. He takes in conflicting signals from the environment to figure out the underlying Markov Chain that holds his environment altogether.

A successful decision marker minimizes the price paid for knowledge of each section of the Markov Chain.

Each success unlocks more resources that could be redeployed to this activity.

Inner fortitude is the primary trait required to navigate the high failure rate inherent to the nature of this activity.

Perpetuate accumulation of mental models from different domains reduces taken to form judgement while  increasing overall batting average.

The executor

The executor operates within an environment that has been made predictable by the activities of the decision maker.

He is predisposed towards systems, structures and processes. A successful executor measures and optimizes with the goal of increasing yield from a well defined process while minimizing costs.

Disciplined consistency is the primary trait required to ensure continued excellence in this repetitive activity.

Concerns

A strong decision maker profile with a weak executor profile will feel repressed/bored when forced to operate as an executor in a structured environment.

An strong executor profile with a weak decision maker profile will feel overwhelmed when required to operate within an unstructured environment.

Related references

Mark Zuckerberg chats with Yuval Noah Harrai on the Future of AI

Key take aways

  • Spread of inequality where some countries have the ability to harness AI while others don’t
  • AI based recommendation systems moving from being just an oracle to becoming a sovereign
  • AI as a tool is an amplifier
    • concerns that it will benefit totalitarianism more than democracy leading to totalitarianism becoming a more favorable governance model worldwide
    • surveillance
    • psychological manipulation – the inability to know your true self through your thoughts
    • what happens if morality and expediency diverge when it comes to governance
  • Effectiveness of curbing the negative effects of AI by encoding values within policy frameworks governing these AI based systems
    • Companies based in Democratic countries will encode democratic values within their systems vice versa for Totalitarian countries
  • Personalization versus Fragmentation
    • when everyone in a country chooses his own community that is mainly online there is no longer a glue holding the local community together
  • Long term versus short term
    • The long term benefits might come sooner than expected when taking a short term trade off

 

The mushroom at the end of the world

  • staying alive for every species requires livable collaboration
  • scalability is not an ordinary feature of nature and requires a lot of work
  • expect interactions between scalable and non-scalable projects
  • The bulk of the work is threading through the non-scalable to reach the scalable

On the middle man

  • a necessary consummate translator within the supply chain
  • he maintains a mental map of who needs what
  • helps efficiently route the inventory to the most suitable individual

On Freedom

  • it is the concept of not having to be a cog in the machine.
  • it does not necessarily lead to great economic outcome for the pursuing individual
  • it allows the individual the ability to freely allocate the use of his time

The matsutake mushroom

  • along most parts of supply chain it symbolizes a social exchange which strengthens social ties
  • it is only during the sorting when the mushroom is looked at purely as a commodity

Man and nature

  • The satoyama revitalization
    • man is part of nature
    • man’s disturbance to nature is part of nature
  • unintentional design is the interplay of man and nature
    • animal/human activities/disturbance
    • pine tree growth
    • matsutake mushroom colonization and growth

Book summary: Everybody lies by Seth Stephens-Davidowitz

Signals from Search

  • What people search for is in itself a signal
  • The order of keywords in which they search is also a signal
  • Quality of google search data is better than in Facebook because
    • You are alone with no fear of being judged
    • You have an incentive to be honest

On Big data

  • the needle is still the same size but the haystack has been getting bigger
  • Be judicious by cutting down the sample size of the data to be used

Data science

  • Trust your intuition as the initial signal but verify quantitatively to avoid narrative bias
  • Correlation is most often sufficient for utilization purposes – often the explanation of why the model works comes after the fact
  • critically assess the actual data underlying the narrative. At times it might tell a very different story than narrative presented
  • Clustering of groups of people helps predicts behavior – Netflix and baseball
  • AB testing to discover causations

Social Impact

  • great business are found on:
    • secrets about nature
    • secrets about people
  • Modeling
    • Physics – utilize neat equation
    • Human behavior – probabilistically via Naive Bayes classification

Managing angry people

  • Lecturing them will provoke their anger
  • Provoking their curiousity will cause their attention to be diverted causing anger to subside

Related readings

  • Zero to one, Peter Thiel

Book summary – The Signal and the noise

Risk versus uncertainty

  • Risk can be mathematically modeled to yield a probability
  • uncertainty cannot be mathematically modeled

Conditions for quality data

Why google’s Search data is better than Facebook profile data

  • subject feels she has privacy privacy
  • subject feels she is not judged
  • subject sees tangible benefit from being honest

The hedgehog versus the fox

  • The hedgehog approaches reality through a narrative/ideology while the fox thinks in terms of probabilities
  • The hedgehog goes very deep in an area while the fox employs multiple different models
  • The fox is a better forecaster than the hedgehog
  • The fox is more tolerant of uncertainty

Big data

  • More data does not yield better results and predictions
  • Deciding the right kind of data from the abundance available
  • To do prediction it is important to start from intuition and to keep model simple
  • qualitative data should be weighted and considered
  • Be self aware of your own biases

Prediction

  • Similarity scores – clustering in Netflix and baseball
  • Be wary of confirmation biases
  • Be wary of overfitting using small sample size – Tokyo earthquakes and global warming
  • Correlation does not equal causation
  • short hand heuristics to reduce the computational space – for example chess

Related references

  • Irrational exuberance, Robert Shiller
  • Expert political judgement, Philip E. Tetlock
  • Future shock, Alvin and Heidi Toffler
  • Principles of forecasting, J Scott Armstrong
  • Predicting the unpredictable, Hough

Insights from Monday lunch

From Kevyn Klein on Ambassador programs (VIP Kids)

  • Motivation : Swag, Power, Access and Status
  • Best practices documentation
  • Figure out what motivates them to complete course
  • The first pilot hand picked based on people that were most into product: 15 people
  • Requirement goes up overtime as you get at what you want
  • Test the product
  • Figure out who are the influencers who are passionate
  • Use the program as a reward
  • People are intrinsically motivated
  • Have a kick off webinar to set the expectation
  • Help define what this opportunity
  • Usually first cohort helps u define your program
  • 4 bullet points of what it really means
    • If you over define it then you stifle their creativity
    • Open up the group to let them decide when n where to do the program. Saturday morning instead of Thursday evening in a bar
    • Make them feel like u are organized n framework
  • Business needs: Want to see who is influencer?

Ray Wu (MagicBus)

  • Intercom.IO to handle email tracking
  • Growth hacking, Sean Ellis – read retention section
    • focus on activation and retention
  • understand what users are doing with data
    • Check out AirTable?
  • 1 year runway is sufficient buffer

Ayush (OurHealthMate)

  • Poor activation rate could just be users playing around checking out different chrome extensions simultaneously

Book summary: George Orwell’s 1984

George Orwell

Key take aways

  • To control a population first control the language and supported concepts. This helps frame and thus restrict the thoughts of its users.
  • The further up the hierarchy the increase the need to process contradictory ideas
  • In a totalitarian state, even harboring a thought with no corresponding action is considered a crime
  • The test of a first-rate intelligence is the ability to hold two opposed ideas in mind at the same time and still retain the ability to function, F. Scott Fitzgerald
  • Control over the past allows control of the future. Control of the present allows control of the past
  • Tiers of control and effects
    • Control body without the control mind will lead to martyr – Romans and the Christians
    • Control of body and superficial control of the mind leads to a brittle regime – Soviet Union
    • Control of body and absolute control of mind through history leads a long lasting regime – Missionaries and the catholic church.

Related Readings

Book summary: Your First 100

Your first 100

New Customer versus existing ones

  • New customer is 6 – 7 times harder to acquire than to keep one
  • probability of selling to new prospect 5-20% versus 60-70% existing customer
  • loyal customer worth 10X their first purchase

Customer and feelings

  • Loyal customer are buying into an experience they know they will get from your brand.
  • Profiles
    • readers
    • subscribers
    • buyers

Brand

  • What people say when you are not in the room, Jeff Bezos
  • It is tied to their sensory cues
  • Brand strategy is where you tell people how you want your brand to be perceived by your presentation of the different components
  • Your brand should be very targeted and not sell to everybody, only to those who will benefit the most from your offering. That is the basis of differentiation

Experience – components in a brand

  • product
  • website
  • delivery
  • customer service
  • payment

Touch points

  • Pre-touch point: someone mentioned you to them
  • premier first touch point: landing page
  • pivotal touch point: reading up more about your product on your website
    • category 1: no idea about the problem you are solving
    • category 2: aware of the problem
    • category 3: aware of problem, trust and love your content
    • category 4: ready to buy but have questions
    • category 5: made a purchase
  • prime touch point: onboarding & magic moment
  • post touch point: getting referrals

Content tilt

  • To focus on going deep and narrow in the content you create

Prospect behavior

  • 95% not ready but
  • 70% will eventually buy from you or your competitor
  • Only 3% are actively buying at anytime.

Related readings

  • What customers crave, Nicholas J Webb
  • Top of mind, John Hall
  • Lead generation for complex sale, Brain Carroll
  • Content Inc, Joe Pulizzi
  • Sticky Branding, Jeremy Miller

Coaching for founders

  • As a CEO, being in the trenches feels a lot like being punched in the face over and over again
  • A lot of dysfunctions in teams boils down to not being clear about roles and responsibilities
  • always talk about the task and not about the person
  • The (blame of the screw up) Buck stops with the CEO whose role and responsibility includes being the ultimate decision maker
  • It is the CEO’s job to bring up difficult conversations that are necessary
  • performance issues boil down to two types motivational, perceived or ability
    • motivation because feeling burned out
    • perceived because role n responsibility not clear
    • ability then not supposed to clear  skillset mismatch