Owning the stack gives you control

When you own the stack, you have control. To close the loop entirely, AT&T set about designing its own radio sets. AT&T’s new radios were engineered to receive only AT&T broadcast frequencies — and, not surprisingly, only AT&T programming. (Master Switch)

When does vertical integration enable you to succeed in an industry and when does it not?

I used to think it was better to outsource things you are not good at, and instead focus on your key strengths — then why is Tesla trying to bring manufacturing in house when they could move much faster following Apple’s footsteps and outsourcing their manufacturing to China? After all, the Chinese manufacturers have decades more experience producing electronics and cars and could much more easy troubleshoot problems than we could.

Bringing things in house is what has enabled Tesla to get so far and be the leading electric vehicle company in the world — having no credible competition in the electric car market for 5+ years. Cutting out the middle man enables three things:

  1. Reduces client implementation complexity -> we can build more things!
  2. Lowers costs – we’re not paying someone who is incentivized to charge more
  3. To innovate – we can quickly iterate in-house
I’ve been reading the Master Switch: The Rise and Fall of Information Empires, and it’s fascinating to learn about companies who started with one core competency, and expanded moved things in house to gain a competitive edge. Radio Corporation of America (RCA) for example, originally started as a radio broadcasting company, but decided to start producing and selling radio sets so that they could control the frequencies that the radios could receive.
Are there industries then, that lend themselves more to vertical integration than those that don’t?
The answer is usually mixed. In the computer industry, for example, Microsoft is not vertically integrated but won most of the market share — Apple, on the other hand, is vertically integrated and won the lion’s share of not the market, but the profits.

Similarly, in the mobile phone industry, Google Android is not vertically integrated and has won the market (87%  market share), while the Apple iPhone (12% market share) [1] has contributed to making Apple the most profitable company in the world [2].

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How traveling changes my relationships

On my plane ride recently to Portugal, the server asked me if I wanted anything to drink. I replied no. He said in a Portuguese accent, “Just one cup! The air is really dry here,” and thrusted a cup of water in my hand. I’ve never had this experience on an American airline. I was touched by his rare sense of ownership to people around him.

Once I got to Portugal, I was there for an overnight layover, but I ended up having one of the best nights of my life. I met up with a mutual friend, and even though it was my first time meeting her, I felt like I was meeting up with a long lost friend in a new country. She was disappointed that she couldn’t meet me for dinner because she had work, but gave me an itinerary of all the things I should do that evening — which restaurant I should go to, what I should order, and the order of the sights I should see around the city. She told me she’d meet at 11pm, so after I enjoyed the steak at Carvoaria, the restaurant she recommended, I ordered an espresso. Drinking coffee sometimes feels like pushing a button where you suddenly have twice as much life to live.

We ended up going to a discotheque until 5am.

I don’t like clubbing in America. It feels transactional; a game where people try to hook up. Two men in the corner of the club were trying to do the same thing as they approached two Portuguese women. The women looked very uncomfortable and kept moving away as the men tried to moved closer and twirled them around. They were not having it. Later that night, two of the Portuguese men from our group of friends were talking to the same two women. They talked for several hours on end. It wasn’t until several hours later into the night at 4am that they started dancing. I like how people take their time with each other. The question of “Are you coming home with me tonight?” felt absent.

It was as if I had been thrust into a more evolved version of America, a world where machines have automated all jobs and people are instead on Earth to enjoy life, value their friendships, and cultivate meaningful, non-transactional relationships. My best friend told me that you can think of life as traveling on a bus. Most people, as they travel through life, simply collect other people onto their bus. The passengers are either heading in their direction or they’re no longer on the bus. He doesn’t like to live life like that — he’d prefer to bring someone onto his bus and together, decide where to go. I like this kind of friendship much more — and I realize I don’t have to live in Portugal to adopt these values. When I travel, I learn about how things we consider normal are completely weird in a different context. I can choose what I like from all these different ways of living, and piece it back into my own life.

Working inside the system to kick butt

I meet many people who bash Snapchat or Facebook as products. They think of the products as a waste of time. That’s one way to approach making products. Another way is to do the opposite. Put Snapchat on a pedestal. Ask “What makes Snapchat addictive? How did they get to over a 100 million users? Can we take their strategies and leverage them to achieve our product x’s goals?”

You can adopt this strategy with your career choices too. Gary Gensler worked for Goldman Sachs and became a top manager (this is a career decision some would ordinarily pooh-pooh as selling out), but then he left and worked for the CFTC (Commodity Futures Trading Commission) to help fix the broken and corrupt derivatives market — and he was the only person fit for the job, because no one else in the government understood how derivatives worked. He eventually helped bring transparency to the $400 trillion previously opaque swaps market, transforming the sleepy CFTC into a powerful regulatory force.*

Gary Gensler defends record as he leaves CFTC

Did design make the iPhone successful?

While good design helped Apple’s iPhone gain traction — it was not the driving factor of success, as many people assert. The driving factor was Apple’s  innovation in touch screen technology. Nothing like it had come before — before the iPhone, you could only view sparse, text-only versions of sites like the New York Times.

Examining the evolution of technology allows us to recognize that technologies we see as normal today, such as the internet, were once simply imaginations in someone’s head.

Industry had attempted to create a responsive touch screen for years. The first was a resistive design, a soft touchscreen that flexed under touch to tell the device which part of the screen was being pressed. This flexible screen wasn’t very accurate because the device couldn’t precisely tell where the screen was being pressed. HP took the touchscreen a step further by using lasers. Touching the screen broke the lasers and allowed the device to move the cursor to where the screen was being pressed. This worked but didn’t allow for multitouch. In 2007, Apple released a capacitive touchscreen — the most innovative touchscreen technology ever seen.

While novel touchscreen innovation was the main factor for the iPhone’s success, design had a helping role. When a product is well designed, people are more likely to use it. Think about how flipping through news on Flipboard makes it addictive.

You can also think beyond a UI level about the product’s design more broadly — for example, compare Instagram to Facebook. People can post, like, and comment pictures on Facebook just as they can with Instagram. Many still prefer Instagram over Facebook, despite the features on Instagram simply being a subset of Facebook’s. The reason is Instagram is a product highly focused on one thing — seeing a snapshot of your friend’s life. On Instagram, there are less possible navigation states in which someone could get lost. The minimal interface makes it easy to figure out what to do next. It is this kind of design that plays a much larger role in paradigm shift. Consider the graph for example. Before graphs were designed, we were interacting with numbers either individually or in a list format. The invention of the graph enabled us to see the relationship between different variables in a way that we could not have before.*

* via Bret Victor’s Future of Programming

Good design vs. bad design

When I first started as a designer, I thought frequently about experiences that were well-designed compared to those that were not, and how the outcome differed. What was the value of design? For example, when I click a button and expect a drop down menu to appear, I feel cognitive dissonance when the menu suddenly appears. When the menu slides out however, I feel more at ease. When I use a UI with a lot of jump-cuts (a la things suddenly appearing) my brain has to pretend that all the in-between frames are there. When we use interfaces that actually animate all those in-between frames, however, we can take a shortcut through our visual cortex. The change in interface no longer disrupts the main task.

Think of the human brain like a computer. You have first, a main thread, and second, a GPU – a graphics processing unit in your visual cortex. You can feed people a lot of information through their visual cortex without interrupting what they’re thinking about. Animation allows the user to continue thinking. Imagine using your smartphone without animations. It would be like a tap and jump cut for everything you do. Would you have still bought it?*

Getting more from conversations with advisors

I always think about how to get more from conversations. I often felt like sometimes we would have conversations with top-notch experts in our field had heads filled with specialized information about how drugs are developed at pharma companies, or how billing works in healthcare, but I would never be quite satisfied at the end of our conversation.

I started to try adding structure to my meetings, where I would create a slide presentation for each interview. Each slide contained a hypothesis I had about the industry, the status about the hypothesis, and the next step. I instantly found the conversations I had to be much more stimulating.

When Kurt and I were first building Neurocurious, a machine learning product for pharmaceutical companies, one of the assumptions we had was that pharmaceutical scientists struggled with knowing whether a potential drug was toxic or not. Before structuring our interviews, we would bounce around the question, naively assuming, of course this is a problem scientists struggle with. We then started making slides that had tables like this:

 

And we slowly started filling them out. We learned that an assumption we had thought true to be true for many months — that scientists would use our software to learn the toxic side effects of their drugs — was in fact not a problem. When we interviewed an ex-Pfizer director who headed their toxicology team, we learned that pharmaceutical companies, for the most part, have tox figured out. He told us, “Toxicology was a problem 20 years ago, but not anymore.”

While large companies didn’t care very much about tox, we kept interviewing all sorts of people in pharma and learned that smaller startup therapeutics companies do care about their tox, because the large pharma companies that might acquire them want to de-risk the potential drug as much as possible.

We revised our slides:

 

Over the course of interviewing over 100 executives, business developers, and scientists in the pharmaceutical industry, and iterating on our hypotheses, we now have a set of refined hypotheses about the problems that pharmaceutical scientists struggle with. These set of problems can be used to design a product whose value proposition aligns much more closely with the problems of the pharmaceutical industry, than the value proposition we had originally began with.

How to stop thinking of new ways to do things

I discovered a dangerous phenomenon the other day over conversation with my co-workers Bret Victor and Glen Chiacchieri.

Bret was speaking of the requests he gets to release the source code for his prototypes, and his rationale behind not doing so — that it could lead to innovation halting, because the release creates a standard for what products should be.

I realized,

When an inventor creates a tool and makes it available to the world, the public has a tendency to simply accept the tool as is, use it, and stop thinking of new ways to do things. (thus halting development of the product).

Example #1: the Pie Chart

Pie charts are pervasive…

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… And a poor way to represent information. (See Edward TufteThe Worst Chart in the World, and Oracle’s Reasons Not to Use a Pie Chart)

A simple example illustrates that pie charts make it difficult to make comparisons between two quantities. See:

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What if we represented the same information like this, instead? This illustration enables us to make direct comparisons between quantities.

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Because pie charts cannot spatially fit all information, they also are pleasantly accompanied by a key (right-hand side), which attempts to illustrate what all the components of the pie chart designate.

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Could we design another way to represent this information — one that doesn’t require you darting your eyes back and forth to understand the information?

What about this?

image

Okay. Maybe not as aesthetically pleasing. Perhaps a reason why people use pie charts is because all the circles look pretty. But I would argue that we should not sell ourselves short — can we not have a representation that is both intuitively functional, and aesthetically pleasing?

I re-designed a representation of the same information; illustrated below.

image

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So what?

These are just pie charts. Okay, it’ll take a millisecond longer to process the percentages. Why does it matter?

I think we vastly underestimate how good the quality of an experience (in this case, understanding and exploring the world) could be, because we already have models in our heads of what the medium is currently like.

One step further: Understanding Bayesian Probability

Another way to view this idea is through the lens of Bayes’ theorem. The traditional example is the cancer testing scenario, where you’re presented with a series of probabilities.

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You are typically asked:

Assuming you have a positive test, what is the chance you have cancer?

When calculated out, the number seems much lower than expected.

Some of us simply accept that our brains do not intuitively grasp probabilities, but I’d argue that statistics is only unintuitive because we don’t have proper representations.

How would you design another representation of Bayes’ Theorem?

More to come.

How Alexander Hamilton increased his luck surface area

When I was in grade school, one of my favorite English teachers would often remind us, “if you can write, you can do anything.” I would always think, “well of course she’s saying that… she’s an English teacher.”

I’m reading Alexander Hamilton’s biography, and he had quite a facility with words, even when he was a teenager growing up in poverty-stricken St. Croix. When a storm devastated the island inhabitants, Hamilton wrote, “…the ear-piercing shrieks of the distressed, were sufficient to strike astonishment into Angels,” in a letter to his father at the tender age of seventeen.

Hamilton may well have stayed in St. Croix for the rest of his life had the Gazette not picked up his letter and published it in their newspaper anonymously. The island governor demanded to know who wrote the letter, and a group of local businessmen raised a fund to send Hamilton to America to be educated.

Before we had writing, we always needed to be in the same place at the same time in order to communicate. The appeal of writing is that it allows you to exchange ideas without time or place needing to be relevant. When I look at some of my role models — I often realize that they’re not particularly smarter than many of the other people in my life — rather, they document their thoughts. Without Paul Graham’s essays, his ideas about the world would be trapped in his head and few would be privy to them. Writing is much more scalable than conversations.

The impact of improv on your professional success

During my last improv class, we did an exercise where everyone had a monologue. I was surprised at how each person was able to make a scene come to life with a beginning, climax, and end so seamlessly. When one of my classmates Olga went on stage and was given the location ‘ice cream shop’, she immediately transformed into an ice cream shop server. As she pranced around the shop, she sampled a taste of ice cream and made the ice cream cone come to life. She took a few licks, and then scolded the ice cream cone for making her butt big, but wrestled with how delicious he was. She finally decided to toss the ice cream in the trash. Every person appeared as if they had been preparing for this scene for the past week.

But none of them had any even preconceived notions in mind. They had all been given a random location on the spot, and had to create a scene based on that location.

I notice an analog in programming. When I was pair programming with our front-end developer Bruno today, I asked why he had defined a function in class A but not in class B, I expected him to be prepared with an answer. Instead, he said “Let’s investigate” and opened class A, going line by line to trace back where the method was being used. He realized that there actually was no need for that method and we ended up taking it out.

You can’t know the answers to some things in life. And trying to hold everything in your head is exhausting. What you can do is be quick to adjust in the moment and execute on the spot.