“The Innovator’s Dilemma” by Clayton M. Christensen

It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.

—Steve Jobs

This book is about how technology is driven forward by small companies while larger firms often become bloated and obsolete. Even though the companies with the most money and employees might make a discovery it’s oftentimes not in their best interest to make a business off of this new technology.

Oftentimes, innovations aren’t immediately profitable and their utility isn’t immediately apparent. The book heavily influenced Steve Jobs, Jeff Bezos and many other technology entrepreneurs of the past couple decades. This is why newer technology companies are so segmented and have divisions in so many different products, both mature and developing. Google is in effect run more like a conglomeration of many smaller business (advertising, search, maps, flying cars) than a single entity.

Giant companies have a tough time competing with smaller, more flexible companies. I found this quote from the book I’m currently reading, Nonzero: The Logic of Human Destiny” by Robert Wright, to do a good job putting this phenomenon into a larger historical context:

When a civilization such as Rome dominates its neighbors, it typically possesses some sort of cultural edge: better weapons, say, or better economic organization. Yet this dominance is hard to maintain precisely because these valuable memes tend naturally to spread beyond its borders, empowering its rivals. In the case of Rome, the barbarian-empowering memes included military strategy. But the exact memes will differ from case to case. As the historian Mark Elvin has observed, the diffusion of Chinese iron-making technology to the Mongols during the thirteenth century would come back to haunt China. Elvin was among the first to clearly see that this is a general dynamic in history: the very advancement of advanced societies can bring the seeds of their destruction. As Elman Service put the matter: “The precocious developing society broadcasts its seeds, so to speak, outside its own area, and some of them root and grow vigorously in new soil, sometimes becoming stronger than the parent stock, finally to dominate both their environments.”

Companies, just like countries, face growing pains from competition.

Further links:
MIT Summary
Farnam Street: “Escape The Innovator’s Dilemma”
Clayton Christensen Talks About The Innovator’s Dilemma
Buy from Amazon:The Innovator’s Dilemma: The Revolutionary Book That Will Change the Way You Do Business

Interesting anecdotes and new vocabulary:

The first hard drive
Bernoulli’s Principal: The physical law that liquid flows faster the less constricted it is.
Joseph Schumpter ‘creative destruction’: “the process of industrial mutation that incessantly revolutionizes the economic structure from within, incessantly destroying the old one, incessantly creating a new one.”
Early retail innovators: John Wanamaker, George Hartford (A&P), Frank Woolworth, W.T. Grant, General Wood (Sears), Michael Cullen (supermarkets), and Eugene Ferkauf.
locus—Latin for ‘place’ SEE: locus of control
collocated—to be placed side by side.
Technology: as used in this book, means the processes by which an organization transforms labor, capital, materials, and information into products and services of greater value.
Sustaining Technology: Radically or incrementally improving the performance of existing products along the dimensions of performance that mainstream customers in major markets value.
Disruptive Technology: A completely different kind of technology that typically takes a while to catch on and match the performance of the previous technologies in place but eventually comes to dominate the market.
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Why the Myers-Briggs Test is Totally Meaningless.

“…you’ll notice that words like “selfish,” “lazy,” or “mean” don’t appear anywhere [on the Myers-Briggs]. No matter what type you’re assigned, you get a flattering description of yourself as a “thinker,” “performer,” or “nurturer.” This isn’t a test designed to accurately categorize people, but a test designed to make them feel happy after taking it.”

There is more here.

A side note: I wish Vox lived up to its promise and focused more on quality than quantity, instead of peddling mindless click-bait masquerading as intelligent discourse.

Good App: Shredder Chess

I found out about this app from reading ‘Average Is Over’. The chapter on how human intelligence augmented by artificial intelligence has revolutionized the way upper-level chess is played is particularly interesting. Read my review HERE.

Shredder Chess is an app that costs $7.99 in the Google Play store (I think it’s cheaper via iTunes but no matter what the price, who wants to pay for an app?).

The price kept me away from it for a while but one night I drank enough wine to embolden me enough to buy it. I’ve bought dumber apps while intoxicated so what the heck?

Shredder then languished on my home screen for weeks. I didn’t touch it. Truth is, playing chess with a computer isn’t appealing because there’s nothing social or fun about it. That attitude is probably what separates Garry Kasparov from the rest of us.

On a whim the other day I played Shredder on the toilet at work. I was hooked. For the past month I’ve played chess every day whenever I go to the bathroom, and my chess game has greatly improved.

So it makes for a great potty break, but what is it?

Shredder is basically chess with training wheels. You’re allowed to take back any move you make that is crappy by AI standards (“I think that your last move was not so good. Do you want to take it back?”). This babying eventually trains your chess game to be more cold and calculating. Whenever you do win, the difficulty is raised (or lowered when you lose) to best match your skill. There’s even a gauge that measures which color has the advantage, and the option to ask for a suggestion. Behold my proudest moment:

Screenshot_2014-11-18-11-28-47(1)

A bloodless coup if I ever saw one. Get Shredder Chess if you’re looking to improve your chess skills…or if boredom in the bathroom is getting out of hand.

Zero To One: You Are Not A Lottery Ticket

See my review of Peter Thiel’s book Zero To One HERE.

The following is a closer examination of what I think is the most important chapter of that book, ‘You Are Not A Lottery Ticket’. Thank goodness my blog isn’t for a grade because I’d be expelled for plagiarism.

The most pertinent part of this chapter for me personally is when Thiel describes the mindset my parent’s generation raised their children in:

Recent graduates parents often cheer them on the established path. The strange history of the Baby Boom produced a generation of indefinite optimists so used to effortless progress that they feel entitled to it. Whether you were born in 1945 or 1950 or 1955, things got better every year for the first 18 years of your life, and it had nothing to do with you. Technological advance seemed to accelerate automatically, so the Boomers grew up with great expectations but few specific plans for how to fulfill them. Then, when technological progress stalled in the 1970s, increasing income inequality came to the rescue of the most elite Boomers. Every year of adulthood continued to get automatically better and better for the rich and successful. The rest of their generation was left behind, but the wealthy Boomers who shape public opinion today see little reason to question their naive optimism. Since tracked careers worked for them, they can’t imagine that they won’t work for their kids, too.

Malcolm Gladwell says you can’t understand Bill Gates’ success without understanding his fortunate personal context: he grew up in a good family, went to a private school equipped with a computer lab, and counted Paul Allen as a childhood friend. But perhaps you can’t understand Malcolm Gladwell without understanding his historical context as a Boomer (born in 1963). When Baby Boomers grow up and write books to explain why one or another individual is successful, they point to the power of a particular individual’s context as determined by chance. But they miss the even bigger social context for their own preferred explainations: a whole generation learned from childhood to overrate the power of chance and underrate the importance of planning. Gladwell at first appears to be making a contrarian critique of the myth of the self-made businessman, but actually his own account encapsulates the conventional view of a generation.

This is why trying to follow vague life advice like “do what you love” so often results in failure and frustration.

Although his criticism is pointed, Thiel goes on to make a broader point: that our country has forgotten how to plan for the future while still remaining dumbly optimistic. “You can expect the future to take a definite form or you can treat it as hazily uncertain. If you treat the future as something definite, it makes sense to understand it in advance and work to shape it. But if you expect an indefinite future ruled by randomness, you’ll give up on trying to master it”. It’s this indefinite but nevertheless optimistic attitude that he finds to be too pervasive in today’s world.

He divides the way people view the future into four combinations. Basically, when you can look forward to the future you see it as definitely good or definitely bad. Either you plan for it or you try to postpone the inevitable. These are the four worldviews he describes:

Indefinite Pessimism
This person looks forward to a bleak future and has no idea what to do about it.
Definite Pessimism
This person believes that the future can be known, but since what’s coming isn’t good, he must prepare for it.
Definite Optimism
This person knows that the future will be better if he plans and works to make it better. Only with this mindset is innovation possible.
Indefinite Optimism
To an indefinite optimist, the future will be better, but he doesn’t know how exactly, so he won’t make any specific plans. Instead of working for years to build a new product, they rearrange already-invented ones. Bankers make money by rearranging the capital structures of already existing companies. Lawyers resolve disputes over old things or help other people structure their affairs. And private equity investors and management consultants don’t start new businesses; they squeeze extra efficiency from old ones with incessant procedural optimizations. Moonshot ideas are ignored in favor of the sure thing. The future is put off indefinitely in order to “keep options open”.

He laments the loss of the definite optimist in our country in favor of indefinite optimism.

Each generation’s inventors and visionaries surpassed their predecessors. In 1843, the London public was invited to make its first crossing underneath the River Thames by a newly dug tunnel. In 1869,the Suez Canal saved Eurasian shipping traffic from rounding the Cape of Good Hope. In 1914 the Panama Canal cut short the route from Atlantic to Pacific. Even the Great Depression failed to impede relentless progress in the United States, which has always been home to the most far-seeing definite optimists. The Empire State Building was started in 1929 and finished in 1931. The Golden Gate Bridge was started in 1933 and completed in 1937. The Manhattan Project was started in 1941 and had already produced the world’s first nuclear bomb by 1945. Americans continued to remake the face of the world in peacetime: the Interstate Highway System began construction in 1956, and the first 20,000 miles of road were open for driving by 1965. Definite planning even went beyond the surface of this planet: NASA’s Apollo Program began in 1961 and put 12 men on the moon before it finished in 1972.

Bold plans were not reserved just for political leaders or government scientists. In the late 1940s, a Californian named John Reber set out to reinvent the physical geography of the whole San Francisco Bay Area. Reber was a schoolteacher, an amateur theater producer, and a self-taught engineer. Undaunted by his lack of credentials, he publicly proposed to build two large dams in the Bay, construct massive freshwater lakes for drinking water and irrigation, and reclaim 20,000 acres of land for development. Even though he had no personal authority, people took the Reber Plan seriously. It was endorsed by newspaper editorial boards across California. The U.S. Congress held hearings on its feasibility. The Army Corps of Engineers even constructed a 1.5-acre scale model of the Bay in a cavernous Sausalito warehouse to simulate it. These tests revealed technical shortcomings, so the plan wasn’t executed.

But would anybody today take such a vision seriously in the first place? In the 1950s, people welcomed big plans and asked whether the would work. Today a grand plan coming from a schoolteacher would be dismissed as crankery, and a long-range vision coming from anyone more powerful would be derided as hubris. You can still visit the Bay Model in that Sausalito warehouse, but today it’s just a tourist attraction: big plans for the future have become archaic curiosities.

Thiel doesn’t waste time with the obvious argument that innovation is harder than ever before since so much has already been done. His point is that as a society we’ve stopped trying and instead have been employing our best and brightest minds to think of new ways to collect on old ideas and properties. That isn’t the world he wants to live in.