Opportunity cost II

Interestingly, it was around this time a year ago when I wrote about opportunity costs and my mind recently dwelt on this topic again while reading Cal Newport’s Deep Work. He talks about the opportunity cost of distraction, and of course, social media. He reminds all of us to think about the true cost of spending time and attention on social media.

Simply speaking, there is two. First is of course the time spent that could otherwise be used on more productive things. ‘Keeping in touch’ with thousands is known to be not just technically but cognitively impossible. So interactions on social media can at best be very shallow even if there’s rich engagement with a select few whom you are already interacting beyond the confines of the internet. So these online interactions are probably not adding that much to your relationships and the time can be better spent cementing the relationships within the family especially those living in close quarters.

The second opportunity cost is a little more subtle. And it has to do with the fact that social media trains our attention span to become even shorter and creates lots of little dopamine hits which really fools our system and cause us to lose the capacity for ‘deep work’ – the kind that requires more intense concentration and a persistent expenditure of intellectual and cognitive resources in order to achieve results.

I think these are incredibly valuable food for thought.

Life is kind of messed up

Do you live life or does life live you? People think of this general notion of the various milestones and pathways in the passage of living as “life” and “live that out”. We would take ownership of a life that was prescribed for us, constructed by others, expected by society. And we put upon ourselves more and more constraints. I’m not talking about actual commitments, just perceived ones.

Steve Job shared his perspective of this in a 1994 interview that was recorded and I think it sums up perfectly why it is important to rewrite our stories. Not just as an individual, but also as a generation.

Meta falling

I struggle with Meta’s value creation model; it takes people’s attention, passing it to those who value it, and makes off with the money in return. They then mine for more attention, more screen time, more private data to get more value. This sounds compelling but if their interest remains diametrically opposed to the large user base they boast of, it’s doomed to fail at some point.

Why not focus on long term value that is sustainable, aligning their own interest with the users’ interests. Collecting a fee from companies to provide identity verification services based on user data without handing over private data. Or collecting subscription fees to help users protect their private information and allow it to be securedly shared with treasured connections?

There are ways for Meta to reinvent itself to be a giant worthy of its position amongst the tech firm. Just exploring the metaverse isn’t going to be enough.

Thinking about money

We are not all self-sufficient. We rely on our butchers for meat, bakers for bread, and blacksmiths for bronze. Okay maybe not so much the last point. But we need things others produce and create. And our own creations? We can’t survive on them alone. But there are others who want what we produce? Don’t they?

And so we create promises; if you produce this for me, I’ll produce this for that guy who wants this stuff and he’s gonna produce for another girl who wants this other stuff, who’s good at producing yet another thing which actually you sought after. So now you take my promise and your needs are as good as fulfilled when you produce for me. Money is that promise; it is the promise of value for our labour, the promise of fulfilment of our needs.

Then as humans, we realised if you can promise that whole cycle of bartering executed with money, then you can promise a barter with the future self, or future wants, etc. So from the promise of inter-spatial movement of products and services, we move to the promise of inter-temporal movements. This creates a new dynamic because promises age as time passes. Time will tell the quality of the promise; and that will manifest in terms of the value of that promise as time passes. Alas, born the concept of interest.

And because at any point of time, there is going to be lots of overpromises, failure to fulfill them; the system has to make good of it. So when there is overpromising, the value of promise also falls over time. That is where inflation came from. Money in itself has really no value; but the legal tender provides a tool by which government enacts and extracts taxation. This is important because it keeps an economy demanding the instrument as opposed to just using another, more established currency. Taxation as a form of revenue is ultimately more effective to keep the money system from destabilising; compared to just using seignorage as a means of revenue.

Which brings me to an interesting conversation with a friend about Bitcoin. He thinks that using excess energy such as those which would be wasted through flaring, venting of gaseous fuels, or from curtailment events of intermittent renewable energy can be used to mine bitcoins. That way, the energy otherwise wasted is converted to a form of value. It is used to do some kind of work in the bitcoin network, facilitating transactions, securing it.

I am not sure how practical this is but the idea is appealing on the count that we are actually creating a new value stream rather than have mining capture and squander existing energy resources. If bitcoin mining becomes such a “flexible” load in the energy system, it’ll prove incredible value in highly practical ways.

Metric and outcomes

A metric is a good way to hold one accountable for certain outcome. And if you want to set some common indicators of performance that people can agree on, then you can get on with focusing on achieving some degree of the outcome.

The challenge again is Goodhart’s Law where setting a particular measure as a target for certain outcomes make the measure become a poor one. This tends to be rather pronounced in economics, whether you’re thinking about GDP, interest rates (specific ones like LIBOR), even CPI for inflation and so on.

When businesses are measured on their success by profit metric, we forget that they are there to serve the community, to provide goods and services people need and demand for, to improve people’s lives and give them more choices. Those are the outcomes we want. The ability to generate profits merely allows them to continue generating good outcomes.

Likewise, we want to make money to be able to support our families, our (reasonable) lifestyles and maybe free up more time for leisure. But when money becomes tied to your identity, like the way profits have been tied to the identity of businesses, then your ability to provide for your family cease being a good measure of what you’re trying to achieve in life.

We need to focus on the outcomes and ditch the metric when the time for that comes.

Enjoyment & collection

When I was young I collected stamps. And I think I still have a massive stamp collection lurking somewhere. I’d collect lots of stamps from my family’s mails, and my relatives, even distant ones would know I was collecting and give me a whole bunch of them. I wasn’t so discerning and I collected a lot of repetitions, and they looked good when I lined them up.

I’d spend hours soaking, extracting them from the paper they were stuck to, and then drying them out in the sun. I figured it was easy to process when you can stick the wet ones on a plastic sheet and leave it out to dry. By just twisting the plastic sheet when the stamps are mostly dry, you could take out the dried stamps easily. And that process itself was interesting. Never mind the actual stamps. They were nice to look at, the designs were interesting but I never did study them so much in detail – I did not know the history of each of those series, nor how they intertwined with history of the countries they were from. There were commemorative editions which helped me discover things about foreign lands and culture. But that was all the curiosity I had about my stamp collection. I was enjoying it; there wasn’t a checklist I was benchmarking myself against and hunting for that ‘rare stamp’ or to complete a particular ‘collection’.

As far as I was concerned, my collection was always complete, and never complete, at the same time. The thing about us in the modern world today is there’s always something more we want to complete our lives, that we forget to enjoy our lives for what it is today. I need to consider more of my stamp collecting days.

Getting better or feeling better

I was listening to No Stupid Questions and for some reason I just couldn’t recall and capture the specific episode and reference where I got this from but Angela was mentioning that she is working on a paper that looks at some of the kids in school doing some kind of activity. And the conclusion was somewhat related to how they deal with the particular experience, whether they approach it with the desire to feel better about themselves or to improve themselves through the experience.

I thought that was a very interesting dichotomy; and I’ve never really thought of experiences being set up this way. But indeed, as we go into various experiences, that intention lurking in the background is important. There can be mixed intentions but there will likely be a dominant one; and that can affect our functioning.

If we go into an examination thinking of it as a means for us to be sorted into different boxes, to be defined and ‘caught out’ for the level of proficiency we are at, we are going to enter it with a negative fear. That’s when we think the exam is there to make us feel good or bad about ourselves rather than help us get better thanConsider an alternative where we see the exams as a means to look at how far we have progressed and to uncover our weaknesses so we can work on them. There will be nervousness from anticipation but not that overwhelming kind of negative fear. It will also define how we approach the exam papers when we get them back – whether we just check the grade and toss it aside or mine it for the gold of identifying how we can improve.

Is our education system set up to bother about this? To inculcate the right attitudes? How about the parents? Are parents imparting the right attitude towards test-taking?

Problem Solving Apps

I was amongst the audience to a couple of pitches by youth entrepreneurs and this archetype of “we found this problem, and we created an app / website to solve it, we need money to scale this solution now” kept recurring. Defining and highlighting the problem is a significant step to identifying the solution – but the inherent elements of the problems that allows it to be solved using information technology has to be related to information.

The nature of problem solving is such that it should be mostly about the problem and less about the solution. I find it useful when people are able to characterise problems so clearly and well that the solution becomes almost a no-brainer. That’s really the value of most consultants because when we have problems, we tend to ask ‘What’s wrong’ but we don’t really observe the situation well. We are not going down enough into the way the problem distracts us from our end goal – rather, we focus on the phenomena we want to address rather than the mission we hope to accomplish.

I think before we articulate problems, we should first consider what is the mission in the subtext of the problem statement. Then draw out clear implications and consequences of not addressing the problem before diving into solutioning. And each part of the solution should speak to that subtext, and continue helping users get back on their feet to go about what they had wanted to do.

Too many solutions in the world are actually not about solving problems but about giving users new missions instead of old ones. They are more about distracting them from the root of their challenges. Take cosmetics for example; they pretend to deal with image when self-image is the underlying issue to be address. Imagine a beauty company that focuses on psychology as a solution. Won’t that be truly innovative?

Staying Small

When I was in secondary school, I was part of a debate team that had to argue against the house during a round of debate where the motion was ‘This house believes that size matters’. It was a truistic motion; there was no way we could argue against it. The proposition simply has to define size in a way that is broad and all-encompassing including physical, or any other measurable metric, and size matters – not just when it is big but also when it’s small.

Size matters, and sometimes there’s nothing wrong with being small and refusing to scale. Not scaling is different from not growing. A. business can grow in different ways and it’s not just about size. Revenues can grow through pricing up and providing more value for the services rendered to the same client base. Profits can also grow if the products and services can be delivered at ever-increasing efficiency.

Sometimes businesses stays small because the potential client base they are good at servicing is just that group and the business sustains well with healthy margin without forcefully growing. I think we have to understand and appreciate that even from an economic development point of view. This is contributing to diversity and richness in an economy. There’s no need for every business to be like a Starbucks, MacDonalds, or IKEA.

Effort in vain

Does success teach us anything? What can we learn from success if we try to examine the elements of luck that is incorporated? A whole load; it is important for us to recognise whether we are studying success to retrospectively tease out our brilliance or to really examine which part of our efforts actually contribute our success.

One of the problems I notice about people used to achieving success and smart about hacking ‘wins’ is that they want to optimise effort and they hate it when effort is squandered along the way not towards the success they wanted. Yet learning doesn’t work this way. Learning, being creative, solving problems, trying things out is always about applying effort in vain towards the ‘goal’.

But if you notice that your goal is instead is to be a better person, to grow your skills, to deepen your experience, to serve others. Then, detours are just opportunities. And ‘failures’, won’t be in vain. Your efforts are gifts to the world and they are never in vain.