A mental model education

Based off a previous #tweetstorm.

See: So Bill Gates Has This Idea for a History Class . . . by Andrew Ross Sorkin. Some relevant quotes:

Christian’s aim was not to offer discrete accounts of each period so much as to integrate them all into vertiginous conceptual narratives, sweeping through billions of years in the span of a single semester. . . . In the worldview of “Big History,” a discussion about the formation of stars cannot help including Einstein and the hydrogen bomb; a lesson on the rise of life will find its way to Jane Goodall and Dian Fossey.

“Most kids experience school as one damn course after another; there’s nothing to build connections between the courses that they take,” says Bob Bain.

“This course is a fundamental shift in how you deliver something. But there’s so many factors in American education that work against it.”

If any of this interests you, check out David Christian’s Big History Project and watch his TED talk The history of our world in 18 minutes.

Christian’s view of teaching is what I call a mental models approach that weaves narratives from all disciplines. It’s not only more interesting, but a more accurate portrayal.

Unfortunately, it is hard to introduce this into current curriculum. There are bureaucracies and “kingdoms” to protect and people set in their ways.

The easiest way is to build a new eduction system from ground up: rethink everything including:

  • The concept of “classes” and the compartmentalization of subjects (aka the mental model approach).
  • Scheduling — length and timing of the school day, length of the school year, a rigid “period” schedule vs. a more free-flowing approach…
  • Grade levels — why should kids born within a defined 365 day period be taught together? How could this be adjusted?
  • Range of subjects — what else should be taught other than the typical math, science, language, history?
  • Self-motivation policy — is homework useful? What should students do outside of class? How much should the school be involved in this?
  • . . .

There are tools that aid this kind of learning, both in and out of class. Big History is one. I believe something like Atlastory, a project I started, is another.

Mental Model: Fitness Landscapes

Fitness Landscapes are used to visualize the relationship between genetic makeup (genotype) and evolutionary fitness (the ability to survive and reproduce). A fitness landscape is a vast landscape divided into a grid of billions of squares. Each square represents a genotype—some squares represent birds; some fish; some humans; with the majority being all the variations of genetic possibility that couldn’t survive in reality. Each square is very similar to its neighbors: two of the same species with a small variation, or two different but related species. The closer the squares, the more similar the genotype, and the further the squares, the more different. The fitness of each genotype is represented by its height on the landscape. Valleys represent low fitness, mountain peaks high fitness.

Fitness Landscape

Over time, species tend to move up the landscape to the nearest peak (A), where all future paths of variation lead downward. The peak that a genotype “settles” on is most likely to be a local optimum, which is not necessarily the highest peak in the landscape (a global optimum). This is because selection pushes fitness towards nearby peaks (what is called a basis of attraction), but lacks the foresight to select the highest peak.

To get to a higher peak, a species may have to reduce its fitness in the near term (C) as it slowly traverses across a valley in order to improve fitness in the long term. In order to make this shift, there has to be sufficient instability or challenge; otherwise, an organism will not opt to leave the intermediate peak and suffer the unknown prospects of the valley. If the valley is too low or the higher peak too far away, it may be unreachable as the low fitness hurdle can’t be overcome. (An example is the lack of wheeled animals, which although beneficial is inaccessible due to the valley of low fitness genotypes around it.)

Evolution usually moves in small steps, but occasionally it takes wild leaps—a single mutation might give a creature an extra pair of legs or another radically different feature. Most of the time these leaps result in much lower fitness (B), and therefore don’t last. But other times it allows the genotype to jump to a higher peak without the slow process of going down before going up.

Every landscape has different terrain that can be on a scale from flat to rugged. A rugged or coarse landscape has many local peaks and deep valleys, while a flat landscape has only very small hills (all genotypes have about the same success rates).

Landscapes don’t remain static—they shift over time due to either environmental changes or adjustments as organisms move across it. The movement can vary from being stable (relatively flat and slow to change) to roiling (likely rugged and changing quickly). Given the likelihood of ever-shifting landscapes, the evolutionary mix of small steps and occasional wild leaps is the best possible way to adapt to the environment.

Mistakes = information

Mistakes can help us learn

Re-posted from the Atlastory blog.

In Nassim Taleb’s new book “Antifragile,” there’s an interesting segment about how an entire system can be antifragile (benefiting from variability / disorder / stressors) precisely because its individual parts remain fragile (harmed by variability). A few examples:

The engineer and historian of engineering Henry Petroski presents a very elegant point. Had the Titanic not had that famous accident, as fatal as it was, we would have kept building larger and larger ocean liners and the next disaster would have been even more tragic. So the people who perished were sacrificed for the greater good; they unarguable save more lives than were lost. . . . Every plane crash brings us closer to safety, improves the system, and makes the next flight safer.

Thankfully the errors we encounter while developing Atlastory don’t involve anyone dying. But the same principle applies — every bug, problem, server crash, chokepoint, or design flaw we encounter leads to a better system. We want to run into problems, because that means we know about them and can now fix them — eventually making the user experience better as a result.

“Some businesses love their own mistakes,” Taleb continues. “Reinsurance companies, who focus on insuring catastrophic risks . . . manage to do well after a calamity . . . All they need is to keep their mistakes small enough so they can survive them.”

The more you benefit from low-downside mistakes, the more “antifragile” your business is. I see this as a function of both the industry you’re in and the internal culture of the company.

If everyday work and life is viewed as a science experiment (the circle of observe > guess > test > interpret), then any screw-ups or failures are a good thing in the end. You know something’s wrong, and you can work on fixing it. Taleb again: “…every attempt becomes more valuable, more like an expense than an error. And of course you make discoveries along the way.”

Continual improvement is everyday life in software development, but it is only just catching on for personal development.

 

The Tallest Skyscrapers in the World

The tallest skyscrapers in the world, from 1895 on. All pictures link to a hi-res version (some link directly to the image; right-click > open in new tab to avoid slide show).

1895: Milwaukee City Hall, Milwaukee, USA (353 ft.)

1899: Park Row Building, NYC, USA (391 ft.)

1901: Philadelphia City Hall, Philadelphia, USA (511 ft.)

Continue reading “The Tallest Skyscrapers in the World”

Glotz Builds Starbucks

It is 1980: You’ve just inherited Starbucks, a small Seattle business that roasts and sells coffee beans in 4 locations. How would you build it into a company worth more than $30 billion in 30 years?

(Before continuing, make sure you’ve read the template to this post, the famous essay by Charlie Munger about Glotz building Coca-Cola.)

Start with big, no-brainer decisions

Coffee beans are a commodity, so we’d have to find a way to attach a brand name and get customers to repeatedly buy the brand even when similar alternatives are available. Seattle and the Northwest are too small to account for this size of coffee business, so we would have to sell our product to the rest of the country and likely in other first-world countries around the world. There is currently only a small percentage of people in the U.S. that desire to buy high-end, dark-roasted coffee.

So to increase the size of this niche we would have to make it more convenient by selling individual cups of fresh coffee that we brew in each store location. Stores would have to be plentiful with very conveniently accessed locations. This would make it easier for infrequent instant coffee drinkers to try us out and further develop their habit for coffee and Starbucks. Even if it’s higher quality, people still wouldn’t pay much for a simple cup of coffee, so we would have to also sell espresso and milk-based drinks like they do in Europe. These are higher margin and can be highly customized by the customer, which makes it more likely they’ll buy and be attached to the experience.

Numerical fluency

For the business to be worth $30 billion, it would have to be earning pre-tax at least $1.5 billion if the company was doing well. The worldwide potential market would perhaps be around one billion people — if we could achieve 25% market share that means 250 million customers. If each store served 15,000 people, our total store base would have to be about 16,500, which means opening 550 stores a year from now until 2010. This would be a difficult number to achieve so we’d likely have to franchise or sell licenses to increase locations.

If all 15,000 customers per store spent an average of $4 per month at Starbucks (1-2 drinks), that would give us $12 billion of revenue in 2010. Many people already drink coffee every day, so this shouldn’t be too much of a problem. We’d have to achieve a 12.5% operating margin at this level, which is 31 cents for a $2.50 drink. No supplier — other than coffee beans when supply is restricted — has bargaining power and we will be buying their product on a massive scale so minimizing cost of goods sold wont be an issue. Our biggest overhead cost will be rent and wages, though many associates will be part-time due to sales being concentrated in the morning hours as customers commute to work.

Psychological lollapalooza

The caffeine stimulus in coffee will aid habit formation in customers. Habit formation will also be increased by letting people customize their drinks and designing stores with local interests in mind (excessive self-regard tendency). By putting our logo on every cup, we’ll promote social proof.

If customers have a good feeling and good mental association with our brand, they will be more likely to buy and like the product (halo effect). So we must make sure their in-store experience is good, which means good design and paying employees well. We should make stores comfortable enough that people will want to go there regardless of the product. Promoting charitable causes and giving our brand a good environmental image will help as customers become more socially conscious.

What must be avoided?

Loss of brand name or trademark, slipping quality of product or consumer experience.

As we grow, our success will cause other companies to copy our strategy, especially in cities or areas where we aren’t. To minimize this, we will have to expand very quickly, first in major metropolitan areas and then outward from there. Word of mouth and some marketing should help spread brand association and make it easier for us to compete in new areas. If another similar coffee company has already established dominance in a certain region, we should attempt to buy them because it would likely be too costly to break local habit.

My favorite books on business, management, investing and design

Out of the many books I’ve read in different subjects, below is a list of some of my favorites with some brief commentary for some of them. There are a few other “Mental Model” categories (psychology, history, economics, ecology, etc.) that I left out — hopefull they’ll be the subject of another post.

Business theory

  • The Origin and Evolution of New Businesses, Amar Bhide — extensive study of startups of all kinds, how they grow, what makes them successful (this is not a “help” book it is mainly observational)
  • Innovation & Entrepreneurship, Peter Drucker — how companies should systematically innovate — lots of good startup/innovation strategies (it’s not random)
  • The Innovator’s Dilemma, Clayton Christensen — every businessperson or investor needs to read this (and the one below) — every industry’s value chain is disrupted at some point
  • The Innovator’s Solution, Clayton Christensen — expands on “Dilemma” with better explanations and examples — I think the “jobs to be done” concept is one of the most important in business
  • Competition Demystified, Greenwald + Kahn — how businesses capture value by building a moat, and what strategies to use if you have or don’t have one
  • The Halo Effect, Phil Rosonzweig — the anti-business-book — but still has great insights on how businesses work and how best to run them
  • Built to Last, Jim Collins — read this with The Halo Effect in mind — lots of good advice & stories (I like this much better than “Good to Great”)
  • The Strategy Paradox, Michael Raynor — dense at times but a great theory on why strategy is so hard
  • Hidden Champions, Hermann Simon

Continue reading “My favorite books on business, management, investing and design”

Stealing time from customers

When you make a good product or service more efficient, you are giving your customers time.

Never take any of that time back in the future or customers will never forgive you. New versions of a product should always take less of customers time (or the same time at the very least).

How do you take time from customers?

  • Make the product/service less efficient
  • Add unnecessary features
  • Make things slower
  • Leave bugs that confuse and stop flow where it was seamless before

Sure, the newer product may still be better than anything people had before. But you’ve already given them that time, and it’s too late to go back. Charlie Munger calls this “deprival super-reaction syndrome” — another way of saying loss aversion.

Cross-posted on the Atlastory Blog