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jerryking : powerlaw   7

Like great coffee, good ideas take time to percolate
Tim Harford FEBRUARY 2, 2018.

why do some obviously good idea take so long to spread?

Even if you don’t much care about London’s coffee scene, this is an important question. William Gibson, science fiction author, observed that the future is already here — it’s just not evenly distributed....Researchers at the OECD have concluded that within most sectors (for example, coal mining or food retail) there is a large and rising gap in productivity between the typical business and the 100 leading companies in the sector. The leading businesses are nearly 15 times more productive per worker, and almost five times more productive even after adjusting for their use of capital such as buildings, computers and machinery......If there were some way to help good ideas to spread more quickly, more people would have good coffee and much else besides....good ideas can be slow to spread, even when they are straightforward to grasp. In his classic textbook, The Diffusion of Innovations, Everett Rogers points out that many inventions have to cross a cultural divide: the person preaching the good idea is often quite different to the person being preached to. Rogers would probably not have been surprised to see that “not invented here” was a barrier to good practice.....good advice can work, but even good advice wears off. And we can all be resistant to new ideas. The status quo is comfortable, especially for the people who get to call the shots.....An extreme example of resistance to change lies behind the quip that “science advances one funeral at a time”, based on an observation from the physicist Max Planck. A team of economists has studied the evidence from data on academic citations, and found that Planck seems to have been right: the premature death of a star scientist opens up his or her field to productive contributions from outsiders in other domains. People can be so slow to change their minds that we literally have to wait for them to die.

There is an analogy in the marketplace: sometimes old businesses have to die before productivity improves, although that can mean desperate hardship for the workers involved...there is evidence that US industry is becoming less dynamic: there are fewer shocks, and companies respond less to them. The OECD research, too, suggests that the productivity laggards tend to be further behind in markets that are over-regulated or otherwise shielded from competition.

All too often, we don’t pick up good ideas willingly. We grasp for them, in desperation, only when we have no choice (for example, when were facing a crisis, man-made or natural).
barriers_to_adoption  books  cultural_divides  coffee  crisis  customer_adoption  desperation  ideas  ideaviruses  inventions  London  not-invented-here  powerlaw  productivity  science_fiction  status_quo  Tim_Harford  unevenly_distributed  virality  William_Gibson 
february 2018 by jerryking
How Nature Scales Up
June 23, 2017 | WSJ | By Charles C. Mann

Review of SCALE By Geoffrey West; Penguin Press, 479 pages, $30
books  book_reviews  scaling  physicists  growth  innovation  sustainability  cities  economics  business  linearity  efficiencies  economies_of_scale  sublinearity  massive_data_sets  natural_selection  powerlaw 
june 2017 by jerryking
Review: How Laws of Physics Govern Growth in Business and in Cities
MAY 26, 2017 | The New York Times | By JONATHAN A. KNEE

Book review of “Scale: The Universal Laws of Growth, Innovation, Sustainability and the Pace of Life in Organisms, Cities, Economies, and Companies” (Penguin), by Geoffrey West, a theoretical physicist.....Mr. West’s core argument is that the basic mathematical laws of physics governing growth in the physical world apply equally to biological, political and corporate organisms.....The central observation of “Scale” is that a wide variety of complex systems respond similarly to increases in size. Mr. West demonstrates that these similarities reflect the structural nature of the networks that undergird these systems. The book identifies three core common characteristics of the hierarchal networks that deliver energy to these organisms — whether the diverse circulatory systems that power all forms of animal life or the water and electrical networks that power cities. First, the networks are “space filling” — that is, they service the entire organism. Second, the terminal units are largely identical, whether they are the capillaries in our bodies or the faucets and electrical outlets in our homes. Third, a kind of natural selection process operates within these networks so that they are optimized......These shared network qualities explain why when an organism doubles in size, an astonishing range of characteristics, from food consumption to general metabolic rate, grow something less than twice as fast — they scale “sublinearly.” What’s more, “Scale” shows why the precise mathematical factor by which these efficiencies manifest themselves almost always relate to “the magic No. 4.”

Mr. West also provides an elegant explanation of why living organisms have a natural limit to growth and life span following a predictable curve, as an increasing proportion of energy consumed is required for maintenance and less is available to fuel further expansion.

....Despite his reliance on the analysis of huge troves of data to develop and support his theories, in the concluding chapters, Mr. West makes a compelling argument against the “arrogance and narcissism” reflected in the growing fetishization of “big data” in itself. “Data for data’s sake,” he argues, “or the mindless gathering of big data, without any conceptual framework for organizing and understanding it, may actually be bad or even dangerous.”
books  book_reviews  business  cities  economics  efficiencies  economies_of_scale  growth  innovation  Jonathan_Knee  linearity  massive_data_sets  metabolic_rate  natural_selection  physical_world  physics  physicists  powerlaw  scaling  selection_processes  sublinearity  sustainability 
may 2017 by jerryking
Instagram Finds Focus Under ‘Efficiency Guru’
April 13, 2017 | WSJ | By Deepa Seetharaman

Ms. Levine’s biggest contribution, Mr. Systrom says, is helping Instagram avoid the fate analyst Ben Thompson described: “Companies break every time they double.” [See reference to sublinearity in new book of Geoffrey West, “Scale: The Universal Laws of Growth, Innovation, Sustainability and the Pace of Life in Organisms, Cities, Economies, and Companies” (Penguin). Specifically, "infrastructure growth scales in analogous sublinear fashion]

In 2014, Mr. Systrom said he realized he and his co-founder, Mike Krieger, needed help to grow Instagram. Facebook had bought the startup for $1 billion two years earlier, when it had just 13 employees. The pressure was on for Instagram to make money and roll out products at a more rapid clip, and the co-founders saw the need for an executive to manage the expansion.

Marne Levine is “an efficiency guru” who has helped the Instagram app avoid some of the pitfalls of rapid growth. Ms. Levine has skills that are in high demand in Silicon Valley, where startups often struggle to get past their adolescence. Uber Technologies Inc., for instance, is seeking a second-in-command to help founder Travis Kalanick repair the ride-sharing company’s image after allegations of sexism and sexual harassment and the departure of several top executives. “We want to be the 10x company,” Ms. Levine, 46, says. “That means we need to think carefully about how we set up our operations, how we grow and how we scale.”.....A seasoned manager can instill discipline and order, helping new companies avoid wasting time and resources while adding a veneer of professionalism to attract potential customers.
Instagram  Facebook  focus  scaling  growth  Snap  Snapchat  expansions  COO  efficiencies  sublinearity  powerlaw  product_launches  speed  blitzscaling  operational_tempo  10x 
april 2017 by jerryking
The Height of Inequality - Magazine - The Atlantic
The Height of Inequality

America’s productivity gains have gone to giant salaries for just a few
By Clive Crook
income_distribution  income_inequality  powerlaw  productivity  superstars  winner-take-all 
october 2011 by jerryking
The Curse of the Unexpected
12.01.97 | Forbes Magazine |

I GREW UP IN WALES. Its difficult to imagine a place more removed from Silicon Valley and information technology than South Wales. Access to technology there seemed as remote as access to the back side of Mars. My first step was to come to America. After that it was like a homing instinct. I was attracted to the West Coast and gravitated there. I came upon Silicon Valley almost by accident.

I was working for Time at its San Francisco bureau in the early 1980s. That was right near the time when the first personal computer was introduced, so there were lots of stories being done on Silicon Valley companies. Before then I didn't really know what a venture capitalist was. I hadn't heard the term. But I began to run into venture capitalists and started to understand what they did.

Of course, I had no idea how big this would all become. I remember talking to Steve Jobs in the early days of Apple. Apple was probably a $300 million to $400 million company, and Jobs said he didn't see any reason why Apple couldn't be a $10 billion company. I thought he was smoking some strange form of weed.

We don't even use technology very much in our business. We rarely use anything more complicated than the back of an envelope to make a calculation. The computer has become more of a communication tool than a computing tool. Losing it would be like losing the phone. Business is judging and thinking, and reacting to people. It was the same before computers came along.

Every now and then, were reminded that some technology just isn't needed. On a few occasions we've invested in companies because they made some sort of technological gadgets or gizmos that we thought we would like to own and buy, either at the office or at home -- and they've been failures. For example, years ago we invested in a company that was at the dawn of the PC business. It was a bridge between word processors and PCs. We ended up with nothing more to show for our investment than half a dozen typewriters around the office that cost us $300,000 apiece.

There's a perverse thrill to being a hamster on the technology treadmill. It's very exciting trying to fight all the battles that a startup has to win to succeed. But information technology isn't a substitute for any of the real pleasures of life. I don't lose sight of the fact that you can still derive a lot of pleasure from taking a walk in the country, riding a bicycle, reading a book in your backyard, having dinner with family and friends. I don't think computers are a substitute for teaching children how to paint, or play the piano, or think for themselves. This technology wont necessarily make my kids lives better. It might just mean they'll get carpal tunnel syndrome a little sooner.

This technology also is having a major impact on the distribution of wealth. Clearly, many people will have access to information more readily than they have in the past. But the notion that you're going to have a computer or a television in a shantytown outside Buenos Aires doesn't make the shantytown any closer to a penthouse apartment. At the end of the day, I think we're building a world economy where wealth is created within a few chosen companies [JCK: essentially, the powerlaw at work in generating unicorns], and most of the wealth is either owned or shared by the people associated with those companies.

Yes, a whole bunch of people will be enabled by what those companies do. But the real wealth will go to the people intimately associated with those entities. And if your kid doesn't go to MIT or Harvard or CalTech, or half a dozen other prestigious places, forget it. They'll be among the permanently dispossessed
Michael_Moritz  Sequoia  powerlaw  venture_capital  unexpected  Silicon_Valley  Steve_Jobs  vc  unevenly_distributed 
february 2010 by jerryking
Shattering the Bell Curve
Tuesday, April 24, 2007 WSJ book review by DAVID A. SHAYWITZ of Nassim Taleb's The Black Swan.

[how to exploit power laws?]

Life isn't fair. Many of the most coveted spoils -- wealth, fame, links on the Web -- are concentrated among the few. If such a distribution doesn't sound like the familiar bell-shaped curve, you're right......Along the hilly slopes of the bell curve, most values -- the data points that track whatever is being measured -- are clustered around the middle. The average value is also the most common value. The points along the far extremes of the curve contribute very little statistically. If 100 random people gather in a room and the world's tallest man walks in, the average height doesn't change much. But if Bill Gates walks in, the average net worth rises dramatically. Height follows the bell curve in its distribution. Wealth does not: It follows an asymmetric, L-shaped pattern known as a "power law," where most values are below average and a few far above. In the realm of the power law, rare and extreme events dominate the action......In "The Black Swan" -- a kind of cri de coeur -- Mr. Taleb struggles to free us from our misguided allegiance to the bell-curve mindset and awaken us to the dominance of the power law......The attractiveness of the bell curve resides in its democratic distribution and its mathematical accessibility. ......The power-law distribution, by contrast, would seem to have little to recommend it. Not only does it disproportionately reward the few, but it also turns out to be notoriously difficult to derive with precision. The most important events may occur so rarely that existing data points can never truly assure us that the future won't look very different from the present.........The problem, insists Mr. Taleb, is that most of the time we are in the land of the power law [jk: does power law = winner-take-all?] and don't know it. .....Mr. Taleb is fascinated by the rare but pivotal events that characterize life in the power-law world. He calls them Black Swans....Taleb discusses the follies of confirmation bias (our tendency to reaffirm our beliefs rather than contradict them), narrative fallacy (our weakness for compelling stories), silent evidence (our failure to account for what we don't see), ludic fallacy (our willingness to oversimplify and take games or models too seriously), and epistemic arrogance (our habit of overestimating our knowledge and underestimating our ignorance).
biases  book_reviews  black_swan  books  confirmation_bias  fallacies_follies  imprecision  ludic_fallacy  income_distribution  narrative_fallacy  Nassim_Taleb  powerlaw  pretense_of_knowledge  silent_evidence  randomness  unevenly_distributed  winner-take-all 
march 2009 by jerryking

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