Among other things, Hardford explains with several real-world examples one of the risks in big data analysis: jumping to conclusions without considering that the data you have may not be all the data available. (Nassim Taleb calls this data silent data in his book The Black Swan: The Impact of the Highly Improbable.)
Some days ago, talking about work climate with a colleague, he told me that a frequent complain among employees at several companies he knows is about not being properly recognized for their work, while their boss takes the credit.
An italian proverb came to mind: il sangue del soldato fa grande il capitano1 (It’s the blood of the soldier what makes a captain great.)
Recognition being important, it’s not a high-grade motivator. But I can’t avoid sensing some injustice when someone presents the results of a team as his own, without giving proper recognition. I think that what irks an employee is not so much the part about not being recognized for what she has done, but the one about the boss taking the credit for her work.
Giving proper recognition can be a blind spot of some managers. It can be one of our blind spots. You can take the credit for other’s work without fully realizing it. So, some practical advice: when talking about something your business has achieved, start by giving credit to your team, by name.
Chen explains that three feedback loops drive the success of social products:
A feedback loop that rewards content posters when they push new content into the network.
A feedback loop that rewards passive content consumers with relevant and valuable content.
A feedback loop that rewards (and culls) connections within the network.
When the tree loops act in harmony, the players in the ecosystem produce and consume valuable content for the network. When one loop starts to fail, reverse Metcalfe’s Law1 goes into effect, leading ultimately to network collapse.
Innovation in social networks, Chen explains, can come from looking at each loop in isolation, and adding a twist in content creation, consumption, or how people are networked. (Think, for example, in recent products like Secret.)
Bob Metcalfe, the inventor of Ethernet and co-founder of 3Com states that the value of a network is proportional to the square of the number of users of the system (n^2). Applied to social networks, the idea is that every new user in the network connects with every current user, increasing exponentially the number of interactions between the users of the system.
The inverse Metcalfe’s Law simply states that every time a user leaves the network, the network value for the rest of the users decreases exponentially, not linearly. ↩
Tags: social products, social networks, feedback loops
When you set out to create a new product, you usually do not start by trying to think of something completely new. You think of a product or concept that is already “normal” to the world, and then try to make it better. You make it Super Normal.
To apply Super Normal thinking we start by looking at what is normal and then ask the question: What are the key problems?
After mentioning some examples of innovations:
(…) In each of these cases, the innovator did not invent the category. They simply took what was “normal”, and added a twist. They added an innovation. The innovation solved a key problem of the “normal” use case that we all already understood.
(…) In each case, the innovator built on top of concepts which had already been iterated upon billions and billions of times in social systems. Too often we make the mistake of trying to use concepts in our products, and thus words in our interfaces, which have no current meaning to users. As an innovator with limited resources, building a new concept is not something you can usually afford to do.
Reid Hoffman, LinkedIn co-founder and CEO, interviews Matt Mullenweg, founder of Wordpress and CEO of Automattic. They talk mostly about online publishing, but around minute 26 Matt talks about Automattic and its distribuited force of 235 employees:
Just like today it seams crazy to discriminate on something like gender, not just morally but also mathematically —you are taking off half the qualified applicant pool—, just by selection bias you are going to have a less qualified people. And 99.999 percent of people in the world aren’t going to be in the Bay Area (San Francisco). There is a lot of smart people not here. Arguably, collectively more intelligent than the people who are here.
So, when you stop discriminating on the basis of location, what happens? It turns out that you can get incredibly talented and smart folks, who can almost live-style overcharge, in base of Bay-Area-salaries with non-Bay-Area-living [costs].
A lot of people think [that] if you just had more process and more compliance —checks and doble-checks and so forth— you could create a better result in the world. Well, Berkshire has had practically no process. We had hardly any internal auditing until they forced it on us. We just try to operate in a seamless web of deserved trust and be careful whom we trust.
The right culture, the highest and best culture, is a seamless web of deserved trust2.
Good character is very efficient. If you can trust people, your system can be way simpler. There’s enourmous efficiency in good character and dis-efficiency in bad character3
(Don’t miss Exhibit 1 and 2 at the end of the document: CEO Compensation at Costco, and Director Compensation at Berkshire Hathaway.)
Mod is a paper notebook that syncs to the cloud. Once you have filled your gorgeous moleskin-style notebook, you can send it back to Mod and they will have it digitized for you in five days.
You can read here how Mod was launched for $22.450, without taking investor funding, and the pivots to the business model along the way. The guys at NeedWant also give some details of their internal costs.
Seth Godin, talking about the need of business to change their clients:
You can understand Apple Computer if you understand them as a company who wants to give their customers better taste.
Apple is organized around the idea that you show up, and after you leave, you can’t use their competition, because their competition seems tacky, because their competition doesn’t seem elegant, because their competition doesn’t seem as powerful.
They have changed you. They have changed your preception of typography. They have changed what it means to walk into a retail establishment. That change is what they do for a living.
The One Laptop Per Child Project (OLPC) is closing, according to OLPC News.
This was probably a good intentioned initiative. There are several factors about OLPC and its failure that I won’t discuss here. But anybody who thinks that the best way to deliver help to a third-world country is to establish an exclusive distribution channel through its government is, at least, naive, even if he is a genius in other matters.
App.net, or why having a good product is not enough
On April 14, 2014, App.net initial backers will have to decide whether to renew their accounts for $36 a year or downgrade to the limited free version.
For background, App.net is an ad-free online social network that appeared as a reaction to Twitter’s policies changes in 2012. Created by Dalton Caldwell and promoted inside a technically-oriented community, App.net was crowd-funded as a Kickstarter project, raising over $800.000 and 11.000 backers.
App.net business model is simple: they are not a free service. Their main income comes from subscription fees. While they offer a free account, it’s pretty limited and more intended as a trial of the service. In Caldwell’s words,
I believe so deeply in the importance of having a financially sustainable realtime feed API and service that I am going to refocus App.net to become exactly that. (…) This isn’t vaporware.1
But having a great product and a solid financial model is not enough. You need growth. There are some crucial metrics in social networks’ business models, like the number of active users, and user growth rate.
Despite its efforts, App.net current user numbers don’t look good2. After reducing its fee from $50/year to $36/year, and launcing free accounts on February 25, 2013, in May 2013 App.net reached 100.000 users3. App.net also advertises itself as a great API for application developers. You can’t see a huge following there, either.
Despite its technically superiority and the openness of its design —and having raised $2.5M from Andreessen Horowitz on August 2013 doesn’t hurt—, App.net still faces the challenge growing past being a plaything for developers, and amassing a critical mass of users.