Apr 152013
 

Hello Friends:

We’re excited to get the summer started with a freediving class at Stanford Graduate School of Business, May 9 and 10, 6:30-9:30PM, Room E103. You need to attend both sessions, not just one, to cover all the material. The exact classroom number will be posted here soon. If there is enough demand, I will do makeup sessions.

Pool sessions (near Stanford) and ocean sessions (Sonoma and Catalina Island) will be scheduled at the above sessions, depending on people’s schedules.

No payment or deposit required in advance (fee is $150), but please try to RSVP.

We will be doing breathholds in class on May 9, so don’t eat a large dinner right before class. There is a great restaurant on site, so you can grab some food when we take a break after the breathing sessions.

Visitor parking is free at Stanford after 4PM. Turn off of Campus Loop Dr into the garage underneath the business school building. Stanford campus can be confusing, so allocate extra mins for driving on campus and parking.

http://www.gsb.stanford.edu/about/gsbvisitors.html

http://www.gsb.stanford.edu/sites/default/files/map-kmc.pdf

Questions and RSVP to Robert Lee:

haida at stanford.edu

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diver snorkel

Feb 092013
 

The Ten Principles of Underachievement

1) Life’s too short
2) Control is an illusion
3) Expectations lead to misery
4) Great expectations lead to great misery
5) Achievement creates expectations
6) The law of diminishing returns applies everywhere
7) Perfect is the enemy of good
8) The tallest blade of grass is sure to be cut
9) Accomplishment is in the eye of the beholder
10) The 4-per-cent value added principle.

Somehow this book fits into the whole intersectional design philosophy. Especially numbers 6 and 7 from above. This book is a wonderful little monograph from Chronicle Books. Some more:

[A group of students] asked two of the richest men in the world, Bill Gates and Warren Buffet, what they felt was the biggest single factor in their success. Their reply? Being born and living in America. They didn’t have any control over either. It’s a lot like saying that the best way to succeed in life is to choose your parents well. You didn’t choose them, or your genes, or a multitude of other factors that have had an enormous impact on your life. So why put all that pressure on yourself to succeed just because you were given a great mind or superb physical talent? And if you don’t have those things, well…it wasn’t your fault in the first place.

Hardcover (only edition) on Amazon

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Feb 082013
 

In this book, Joseph Schumpeter coined the term “creative destruction”. ‘Nuff said.

Paperback on Amazon

And to recap, the other books in the Design and Innovation reading list are:

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Feb 062013
 

Economist and hedge fund manager Taleb explains that rare, outlier events are not as rare would like to believe, and have such a disproportionate impact that almost nothing else counts, no matter how large a sample of the non-outlier events we see Therefore we should cultivate positive ones (see discussion of the British Spitfire in Adapt) and guard against the negative ones (the 2008 financial crisis). Rational Wiki does a good job of explaining that a black swan event from the book has three properties:

Rarity

The black swan is a rare event. It lies outside the realm of common experience and nothing in our past experience points to its possibility. A black swan is that million-to-one chance that statisticians said would never happen because it was a million-to-one chance. Of course, million-to-one chances happen 9 times out of 10.

Extreme impact

When the black swan strikes, it has a massive impact. It is two of the world’s tallest buildings being destroyed, it is a stock market crash that wipes out billions, it is a tsunami or earthquake over a major city. Not only is the qualitative nature of the black swan outside our regular experience (meaning we can’t see it coming), so is its sheer size — a single event can dominate over all other factors.

Retrospective predictability

This property explains the concept of “black swan blindness” or “black swan denial”. It is the illusion that we can actually see things coming. This is because of the narrative fallacy; our ability to construct a sensible story using only the pertinent information, happily discarding the information that wasn’t actually useful in the end. This can only be done with the benefit of hindsight — failing to understand this makes you more vulnerable to their effects.

Rational Wiki goes on the why Gaussian statics betrays us as a model when we rely on it most:

An important point of Taleb’s is his criticism of the usage of “Gaussian” normal distributions as the backbone of statistical modelling when applied to phenomena that do not seem to follow such a distribution and are instead skewed by rare, but massive outliers. He comes up with the concepts of “Mediocristan” — the realm of properties that are Gaussian in nature, like people’s weight or height — and “Extremistan,” where properties like a person’s fortune, market behaviour or success in intellectual or artistic professions are unevenly distributed, and the inclusion or exclusion of one extreme outlier can massively change the overall picture.

This can be best visualised with a quick thought experiment. Take 100, or even 1000 people and compare their heights. Even adding in Robert Wadlow, the tallest man ever recorded, and his massive 2.72 meter frame he would only take up 0.17% of the total height and would barely skew the average by a single percent. However, if you took 100 or 1000 or even 10,000 people, compared their wealth and added Bill Gates’s amassed fortune he could easily dominate the group, holding 99+% of the money in the group. As Taleb notes when discussing this particular thought experiment in The Black Swan, the other thousands in the group barely represent a rounding error in Bill Gates’s personal fortune, or the average daily change due to random economic fluctuation. It’s this particular property that leads Taleb to conclude that history doesn’t just feature black swan events, but is controlled and shaped by them almost exclusively, with the little accumulative changes making little impact in the grand scheme of things. In Extremistan, a single outlier can absolutely dominate the group as a whole.

Links below are to second edition – 2010

Paperback on Amazon

Kindle on Amazon

Also see Taleb’s recent book Antifragile

Paperback on Amazon

Kindle on Amazon

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Feb 052013
 

From the book publisher

In this groundbreaking book, Tim Harford, the Undercover Economist, shows us a new and inspiring approach to solving the most pressing problems in our lives. When faced with complex situations, we have all become accustomed to looking to our leaders to set out a plan of action and blaze a path to success. Harford argues that today’s challenges simply cannot be tackled with ready-made solutions and expert opinion; the world has become far too unpredictable and profoundly complex. Instead, we must adapt.

Deftly weaving together psychology, evolutionary biology, anthropology, physics, and economics, along with the compelling story of hard-won lessons learned in the field, Harford makes a passionate case for the importance of adaptive trial and error in tackling issues such as climate change, poverty, and financial crises—as well as in fostering innovation and creativity in our business and personal lives.

From the book, Chapter 3

The following excerpt from the book discusses the Spitfire, the radical plane that saved Britain during WWII. It is so pithy and evocative I might as well quote it verbatim. A larger section of the book has been excerpted in the online magazine Slate. The business blog by Tim Kastelle and John Steen also has a good review of the book.

When we invest money now in the hope of payoffs later, we think in terms of a return on our investment—a few percent in a savings account, perhaps, or a higher but riskier reward from the stock market. What was the return on [the] investment of 10,000 pounds? Four hundred and thirty thousand people saved from the gas chambers, and denying Adolf Hitler the atomic bomb. The most calculating economist would hesitate to put a price on that.

Return on investment is simply not a useful way of thinking about new ideas and new technologies. It is impossible to estimate a percentage return on blue-sky research, and it is delusional even to try. Most new technologies fail completely. Most original ideas turn out either to be not original after all, or original for the very good reason that they are useless. And when an original idea does work, the returns can be too high to be sensibly measured. The Spitfire is one of countless examples of these unlikely ideas, which range from the sublime (the mathematician and gambler Gerolamo Cardano first explored the idea of “imaginary numbers” in 1545; these apparently useless curiosities later turned out to be essential for developing radio, television, and computing) to the ridiculous (in 1928, Alexander Fleming didn’t keep his laboratory clean and ended up discovering the world’s first antibiotic in a contaminated Petri dish).

We might be tempted to think of such projects as lottery tickets, because they pay off rarely and spectacularly. They’re rather better than that, in fact. Lotteries are a zero-sum game—all they do is redistribute existing resources, whereas research and development can make everyone better off. And unlike lottery tickets, bold innovation projects do not have a known payoff and a fixed probability of victory. Nassim Taleb, author of The Black Swan, calls such projects “positive black swans.”

Whatever we call them, such ventures present us with a headache. They are vital, because the payoff can be so enormous. But they are also frustrating and unpredictable. Usually they do not pay off at all. We cannot ignore them, and yet we cannot seem to manage them effectively either.

Paperback on Amazon

Various Formats on Amazon

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Feb 042013
 

The classic book on disruptive technology by Harvard Business professor Clayton Christensen. Find out why disruptive technology sneaks up on competitors, and why it is routinely ignored by the dominant market players.

From the Book

There are times at which it is right not to listen to customers, right to invest in developing lower-performance products that promise lower margins, and right to aggressively pursue small, rather than substantial, markets. Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use.

Generally, disruptive technologies underperform established products in mainstream markets. But they have other features that a few fringe (and generally new) customers value. Products based on disruptive technologies are typically cheaper, simpler, smaller, and, frequently, more convenient to use.

Every innovation is difficult. That difficulty is compounded immeasurably, however, when a project is embedded in an organization in which most people are continually questioning why the project is being done at all.

Hardcover on Amazon

Paperback on Amazon

Kindle on Amazon

Also see Clayton Christensen’s recent best seller, How Will You Measure Your Life?

Hardcover on Amazon

Kindle on Amazon

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Feb 032013
 

From the book publisher

Why do so many world-changing insights come from people with little or no related experience? Charles Darwin was a geologist when he proposed the theory of evolution. And it was an astronomer who finally explained what happened to the dinosaurs. Frans Johansson’s The Medici Effect shows how breakthrough ideas most often occur when we bring concepts from one field into a new, unfamiliar territory, and offers examples how we can turn the ideas we discover into path-breaking innovations.

From the book, Chapter 8

Linus Pauling, Nobel Laureate in both chemistry and peace, once said, “The best way to get a good idea is to have a lot of ideas.”

How then, can you seize the myriad opportunities at the Intersection?

There are at least three ways to proceed:

  • Strike a balance between depth and breadth
  • Actively generate many ideas
  • Allow time for evaluation

One way to handle the need for broad but deep knowledge is to team up with someone who has a different knowledge base from yours.

[Within an individual] one should gain knowledge in one specific area before striking out to other fields. I am not talking about world-leading expertise here, but enough to call it a core competence. Mijail Serruya at Brown’s Brain Science Program says that no matter how broadly other view him, he can “at least teach a second year course in neurology.”

Hardcover on Amazon

Paperback on Amazon

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Feb 022013
 

 

dschool logo

 

One of the privileges I (Robert) have as a research fellow at Stanford is that I get take Stanford classes, including at the Hasso Platner Institute of Design (shorthand dschool). The Stanford dschool focuses on human-centered design and celebrates interdisciplinary thinking. Hasso Platner is one of the world’s great technology entrepreneurs, the founder of pioneering enterprise software company SAP. In most settings, including business and R&D, risk is something to be mitigated and ROI is something to be managed through the use of rational planning. Management, for example, is selected on the basis of experience, track record and deep expertise. Yet the most fundamental innovations tend to come from outsiders or complete novices. Steve Jobs and Bill Gates, for example, had essentially no work experience when they founded Apple and Microsoft.

Cultivation of positive black swans, as Nassim Nicholas Taleb calls them, with their incalculably large returns, requires a different sense of risk, or perhaps risk agnosticism. There are times when expertise is of value (most of the time). But there are times when expertise has no value, and times when expertise has anti-value, because the environment is so new, the rules so foreign, that expertise actually works against you. The expert strives for incremental innovation, the novice can leap frog him by coming up with something entirely new. And while experts are right most of the time, the rare times that they are wrong, they are very wrong, and those few times count for a lot.

The outside/beginner point of view is also useful when you are trying to escape the pull of a local maximum to find a more global one. Expertise is what pushed you up to the hill to the local maximum. Part of design thinking is taking a random walk away from the local maximum, which can be uncomfortable. Eschew local maxima!

dschool

Consider the following quotes:

A change in perspective is worth 80 IQ points.
– Alan Kay, Inventor of the Graphical User Interface

I succeeded as a cartoonist with negligible art talent, some basic writing skills, an ordinary sense of humor and a bit of experience in the business world. The “Dilbert” comic is a combination of all four skills. The world has plenty of better artists, smarter writers, funnier humorists and more experienced business people. The rare part is that each of those modest skills is collected in one person. That’s how value is created.
– Scott Adams

In the beginner’s mind there are many possibilities, in the expert’s mind there are few.
– Shunryu Suzuki, First Master of the San Francisco Zen Center

And so, in this vein, I present to you my easy to digest, mostly modern, reading list of innovation that comes from novice, outsider, or intersectional thinking.

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