Category Archives: Life

Daniel Kahneman proposed the prospect theory which essentially relates to our views towards risk-taking. What was originally showing up in terms of financial decisions begins to be recognised in other situations as well. In general, when dealing with change, we face some difficulty recognising something new is better when we haven’t yet experience the full benefit and may resist it even if it’s better than status quo because the lost of status quo feels much more painful for us.

For some reason, I think improvements in living standards have made us less capable of grappling with loss. Smaller things in life seem to become such a big deal that earlier generations would not have understood why they afflict us so badly. In some sense, modernity and the physical comforts of life are starting to make us even more fragile mentally. And we have come to be more and more reliant on not just certainty but somehow having almost all of our expectations fulfilled.

And that is to say even if things do not move along with expectations, there is a sense of loss which is felt. What is operating today is growing to be a pandemic of mental issues and I believe it is not just about re-tuning our expectations but coming back to embrace human-ness, struggles, failure and tragedy as integral parts of life. We are better because of these challenges and not worst off. We better start recognising that.

I wrote about smoking as an example of great cultural and behavioural change even when capitalist incentives were against the trend. There was a time of course when businesses were happy to produce cigarettes and tobacco and many things helped to conspire to remove it from most of our daily lives. That included government action (taxes, regulations for labeling, import restrictions, etc.), companies (benefiting non-smokers, rewarding them more), society (stigmatisation of smoking, some degree of marginalising smokers) and the market (some enlightened investors are choosing not to put their capital in such companies that damages lives)

It takes everyone to work on it, and they only do a small part. But it works, and can bring about broad, sweeping changes which seemed tiny in retrospect.

The truth is, industries are smoking, our power plants are smoking, agriculture industry is smoking. Why are we not taxing them, stigmatising them and rewarding the non-smokers more? Yes I’m talking about carbon dioxide emissions. We need to be able to track, monitor and release details about behaviours and get companies to act. It’s time for “No Smoking 2.0”.

Cultural and behavioural change can happen. Think about smoking, how it was stigmatised, especially when the non-smokers are affected by the smokers. People used to be able to endure others, and thought it normal to smoke indoors. But then gradually, rules changed and then smokers became marginalised. It switched from the default where smokers think they have every right to be puffing around to the extent they feel apologetic about smoking.

Research and studies demonstrating the harm to bodies helps. Not just the impact on the single individual taking the action, but also on those around him. It seemed very significant even though it can be just one individual himself. But it took decades to try and work on this problem. It took excise taxes and more of it. In Singapore there were ‘yellow box’ areas where you can smoke in various places.

It took somewhat coordinated efforts within a country, alongside corporate decisions, to take on smoking. Companies started realising that smokers were taking smoke breaks that on aggregate meant they spent less time working. Whether they were more productive in the hours they did work, I’m not sure. But there are even companies giving non-smoker extra days off to appreciate them for not smoking. Healthier employees also make for better work.

We can create culture and behavioural change even when there are big capitalist incentives not to. Tobacco companies do very well financially; and they have a ‘sticky’ product; in fact, it is so price inelastic that taxes on it can be very high and governments generate revenues without technically causing too much deadweight loss due to this lack of elasticity (in other words, quantity consumed is not distorted much by the tax).

Smoking has given us a great example of this change.

We optimise and invest into the status quo over and over again as we reinforce our behaviours, go to our favourite places, consume our favourite products. And this status quo is that of a carbon intensive, high carbon economy that spews out lots of carbon dioxide around me and across the world. Investing into this status quo makes sense because of the past investments. It is easier to make a car that already runs run faster than to make a new technology that will help get a stationary box to start moving.

But when you invest into the status quo, it makes it harder and harder to change and move away. When you’ve mastered Microsoft Excel, it is hard for you to adopt a new spreadsheet tool. And because more people have mastered it, the tool becomes more and more entrenched because someone else can share the file with you and you’d understand too. So you continue mastering it, and getting better at it.

A lot of the economy, the whole industrial complex works this way. But then at some point you might detect a crack in the status quo. Maybe it is cracking under its own weight or perhaps it is increasingly being used beyond its original design intent. Many have tried to build complex and clunky models inside Excel when it is more efficiently served by other programming language. So then status quo might break down by itself.

Or in other cases, the status quo does not break down but create problems for those who are perpetuating it. In the case of climate change, our status quo of a carbon-intensive economy is creating huge challenges for us right now and for the future generations. To get out of the cycle, we need to make changes; we need to invest in new areas that may not be as attractive as the status quo. We will need to spend effort thinking through old problems and solve them with new ways. We will need to tie up some of our options, and cast old solutions aside.

Are you ready to do that?

There are things you once have and then gone. But there are also options that gets discarded when a choice is made. The choice you made cease being an option but just the path you go down. So you are losing all the options when you make a decision.

Our modern, liberal, capitalistic society celebrates some kind of freedom in the form of optionality. But life is essentially about removing options continually. In fact, as I learnt from Oliver Burkeman, the latin word for “decide” has the element of “cutting off” which is why it looks similar to “homocide”, and “suicide”.

The question is how we experience losing this optionality as if it was an actual thing we had. The problem with holding on to options is that we never really get to enjoy what they actually stand for by holding it. In order to move forward, we actually have to embrace a decision and sacrifice optionality. That is a gain rather than a loss.

But for some reason, that is still so strongly felt as a loss. The framing is probably a result of a lifetime of being conditioned into thinking that we should always be trying to build more options for ourselves. Even in school, we have more options when we do well and in many cases, we wanted to have more choice over the subjects we can do by doing well academically. What is less obvious is that shedding those options, and coming to a focal point on what to do became incredibly painful when one spent a long academic career amassing options. We can’t seem to appreciate that life is really about eliminating options – but sooner or later, we will have to.

We talked about two-part pricing and some of that involves the use of subscriptions. Subscriptions are interesting because they ensure the match between the flow of services and the cashflow. This allows goods or services to be continuously supplied regardless of whether they are actually consumed or not. This gives producers the ability to invest more, produce their goods more cheaply, and leverage on the existing base of users to serve more people.

All well and good. The key is to enable those users to feel that there’s added value in subscribing instead of not. Especially in the world where there’s tonnes of free content out there, it is difficult to believe in value from subscriber content.

Despite the challenge, I’m creating a new subscription model where readers who would like to support my continued blogging, ideation and sharing to contribute through subscribing to my Kevlow Blog podcast. It allows me to offer additional value beyond the free daily blog posts to those who care about them and would like to support me while keeping my blog free for anyone and everyone. As a perk, you get an almost daily dose of audio track version of my blog posts. You’ll be hearing the voice of a (probably AI) system by Anchor.fm reading my writings but it sounds pretty smooth and comfortable in my opinion.

I think listening to them at 0.75x speed is ideal because writing text from me can be somewhat mouthful and harder to follow than very verbal writings. So once again, I hope you’d support me.

If someone came along and asked you for money, saying, we’re pooling little bits of money from everyone in order to get a really big pool. We’ll then pick one of those who contributed money to get the entire pool of money. Will you contribute? Well, depends on how they are doing to do the picking. It would probably be some kind of random mechanism.

Maybe it also depends on your trust in the system and what is the intention of doing this pooling. Or the known results of this pooling. What if I told you that the beneficiary of the funds-pooling routinely loses all the money and his or her life is destroyed by the sudden windfall? Would you still go ahead to contribute? To what extent would you contribute in hopes that you are the recipient of that windfall?

Well, I’m effectively describing the lottery. Millions of people are still on it around the world. For the simple narrative of buying a slice of hope. Yet if you go out there suggesting that we take micropayments from everyone to make a single person rich, no one will actually support you. It is curious how shifting the storyline works so well. And the lottery is basically a manifestation of how the right storyline sells.

How do you determine what to do in a business? Is it based on what the boss decides? How do we decide when an idea is good and worth following? Is it when everyone agrees or when there is so many disagreements? What makes a good idea anyways?

In a company, especially an organisation that exists in a marketplace for talents, good ideas must win in it. This is true even for public organisations: government ministries and agencies, non-profits, and special entities that seem to have no market competition. This is because they are still in the marketplace for talents. They rely on smart and capable people to get things done. Such organisations need to structure themselves to harness the best ideas and allow them to win, in order to keep their talents, and continue producing results worthwhile of their existence.

When they allow authority and bosses to win, then they forgo the ability to attract and retain talents. No one would work for a boss or environment where the only way to win was to amass lots of power and authority. So regardless of how much you might think the bosses or those with authority have got the information and the right intentions to make the decisions, the real winning decisions are those backed by good ideas and supported by the best people with the best intentions.

Through my career in teaching, government and consulting, I’ve advised people on strategy and competition. One of my key takeaway from life experience and observing the dynamics in the market is that competitiveness is not actually the best way to compete. Most of the best achievers I see out there takes on market leadership moves – typically activities that create rather than divert business.

For example, in school, I shared my notes with classmates, coached them, gave them my responses to assignments. Friends of mine through school have benefited from my guidance and help. In exchange, I did better than I could have done because I’ve sought to teach others what I learnt, which reinforced my learning better than any other approaches. Whether I could do better than others, was irrelevant in the tactics I’ve adopted because I never wanted to bother about ‘competition’.

Subsequently at work, I noticed there were people who were competitive at work, keeping knowledge to themselves and working quietly to outshine others, or networking with bosses. And there were those who mentored and coached younger colleagues, choosing to spend more time helping others get better at work and sharing the mission of the work.

There will always be people who are competitive, who is out there to climb ladders that are built for them. There will scale heights, but only limited by what the system and the existing infrastructure can afford them. True breakthroughs are going to come from those who did not set out to go high or far by the well-recognized parameters.

In economics speak, the law of diminishing marginal returns sets in at some point. We don’t know what point it sets in but most of economic analysis seem to look at situations where the law of diminishing marginal return has already set in. That is really the only way we can ensure that the system has some sort of equilibrium. And within a limited timeframe of analysis, that is probably true – there is always some kind of limit that is causing the cost curve to be upward sloping.

So Moore’s law is a little bit of a challenge to that notion; but in reality, it does not contradict typical economic analysis because economist is always taking a snapshot in time. And when it doesn’t work, we take the ‘long run’ which is meant to say ‘eternity’ basically. This time horizon between the short run and the long run, which is when just about everything happens, is where we don’t have the clear view.

And because we don’t have a clear view, there are possibilities, lots of them. Moore’s law has been around for 60 years and been predicted to end for a long time now. The reason we think it is going to end is the idea that the diminishing returns will set in somehow. I think there’s no doubt it’ll end at some point. Preparing for that possibility is important; but maybe not as important as the opportunity that present itself from the time it is true.