The Future of Tipping

December 2, 2014 By

A couple of weeks ago, I was introduced to the bitcoin-based tipping service for Twitter, ChangeTip, by Leslie John Dilley. It is a fascinating thing to experiment with, and you should try it out if you’re interested in bitcoin. What makes it particularly interesting is that you can define your own pseudo-currency units called “monikers”. The result is a deceptively simple-seeming UX that not only lowers online tipping friction dramatically, but nails the psychology of tipping in a very powerful way. You simply mention who you want to tip in a tweet, and how much (using either a standard unit or a personalized moniker), and cc @ChangeTip. The service then sends out a tweet inviting the recepient to collect. The second tweet looks like this (notice how the 2nd and 3rd examples in the image are using personalized monikers; “bits” in the first one is one of the standard system-wide monikers):

ChangeTip

 

Besides making you feel all important because you get to name your own currency, it is interesting because it helps you shape the social perceptions that ride along with a tip. One of my personal monikers, for instance, is “refactorings” where a refactoring is worth one penny. If I tip somebody 100 refactorings on Twitter, it means they get a dollar if they choose to collect, and if they know me, they also know that they’re getting it because one of their tweets helped me see something in a new way.

The idea of shaping the perceived meaning of a transaction is a hugely important one I think, and opens up very interesting new territories for economics. One of its effects might well be to increase the importance of tipping and decrease the importance of “meaningless” basal transactions. This is an interesting development because one of my assumptions so far has been that digital transactions break tipping cultures.

I have now changed my mind to the polar opposite view: going digital will eventually strengthen tipping culture to the point where the tipping economy might even become bigger than the basal transactional economy.

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The Design of Crash-Only Societies

November 14, 2014 By

Ryan Tanaka is a resident blogger, visiting us from his home turf at http://ryan-writer.com.  The improv session that inspired this article can be found here.

Blue Screen of Death Windows 8

Crash-only software: it only stops by crashing, and only starts by recovering.  It formalizes Murphy’s Law and creative-destruction into an applicable practice, where the end-of-things and the worst of outcomes are anticipated as something to be expected as a routine occurrence.  When done well, however, it has the potential to make software more reliable, less erratic, faster and easier to use overall.

But there is also a social component to crash-only designs that has yet to be fully explored: the potential for using these ideas to develop practices for building communities and social applications online.  As the worlds of tech, politics, and culture continue to collide, the demand for alternative modes of communication will likely continue to rise.  Crash-only designs hint at possible new approaches toward community and content moderation on the web, expanding the means and methods by which online content and interactions can be organized more effectively and intuitively.

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The Adjacency Fallacy

October 8, 2014 By

Lately, I’ve been having quite a few conversations with people who are trying to reinvent themselves for the new economy. The most common pattern is MBA-types trying to reinvent themselves as entrepreneurial types. The second most common pattern is mid-career types who would normally be moving into either middle management roles trying to reinvent themselves as online lifestyle business types.

It took me a few data points to spot the pattern, but I eventually realized that most people navigating such moves don’t get stuck trying to acquire new, relevant skills. That is actually not quite as hard to do as people think. In many cases, you barely need any skills retraining at all. Often you need no new skills at all. You might even be able to drop some skills and get by with a subset of the skills you had to use before.

The sticking point tends to be something I call the adjacency fallacy: the idea that the roles that suit your personality and soft-skill strengths are likely to be socially adjacent to the one you are leaving behind. “Nearby” roles in some sense.  What sense precisely, we’ll get to.

Adjacency thinking works poorly even if you stick to the old economy. Over the years, we’ve seen the metaphor get increasingly complicated: from the “career ladder” to “lateral moves” to Sheryl Sandberg’s  notion of a “career jungle gym.” The last is a concept so byzantine, merely thinking of it exhausts me to the point of wanting to take a nap.

But adjacency thinking does not work at all if you’re navigating a path from old economy to new economy.

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The Political Hangover of Prohibition

September 30, 2014 By

This is a guest post by Craig Roche, a data scientist and artisanal landlord.

Whiskey is very easy to make.  Farmers used to make it at home using their crops, and Henry Ford designed the Model T to run on home-distilled ethanol.  George Washington distilled 55,000 bottles/year when he retired from being President. Even the mutineers from the Bounty set up a still on Pitcairn Island, and proceeded to get rip-roaringly drunk for weeks at a time. Whiskey is also very cheap to produce;  a bushel of corn ($5 or so), plus 60 cents worth of natural gas can produce 11 liters of automobile-grade ethanol, which, when suitably diluted and aged for drinking purposes, can fill 35 bottles.  Whiskey for human consumption requires higher-quality inputs, more energy for multiple distillations, and additional handling, but even so, decent hooch can be produced for less than $2/bottle. In the 1830s, the equivalent of a bottle of whiskey went for about $5, and Americans responded by guzzling roughly one each week per capita; as young children generally abstained, actual drinkers drank substantially more, all of which was tax-free.

If we assume that the desire to drink, especially among the poor, is an important motivation in peoples’ lives, you would expect alcohol markets to shed light on political conditions across states.

Jack Daniels is the world’s most popular brand of whiskey, and is widely distributed in every state in the US in a standard 750ml container; it is produced fairly close to the mean center of US population, so it should therefore work as a good lens on alcohol politics. Left to a free market, one would reasonably expect that the cost of a retailed bottle would vary with transportation costs, and somewhat with labor rates, or alternatively, that lower-income consumers would spend about the same fraction of their income on Jack Daniels across the USA, or in other words, that the working time per bottle would be constant.

To test this, I researched the cost of a standard bottle of Jack Daniels in each of the states at a high-volume liquor store in the largest city in each state, and compared it to the average wage at the 25th percentile:

laborCost

Figure 1: Labor Cost of Jack Daniels (Image source: Craig Roche)

The results were not what I expected. It turns out that the constant-working-time-per-bottle hypothesis is not even close.

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The Rhythms of Information: Flow-Pacing and Spacetime

September 24, 2014 By

Ryan Tanaka is a blogging resident visiting us from ryan-writer.com. For every article that he writes, Ryan also improvises a live musical piece as means of organizing his ideas. (Below, or here.)

“Flow Pacing” is a phrase used in chemical, sewage, and water facilities in order to describe the treatment methods of its contents, often referring to techniques that inject/extract chemicals and materials into its flow.  Flow pacing can be a very interesting challenge for engineers, because in addition to tracking physical dimensions and working with limitations of resources, you also have to take time into consideration when dealing with its problems and potential solutions.  When the flow of content is non-stop and never ending, you don’t really have the luxury of measuring change in terms of absolutes — it must be introduced gradually, as a series of iterations or applications happening over time.

Ambient-Minimalism

If today’s improv were to be written down in musical notation, it might look something like this.

 

Chlorine injections that flow too slowly leaves the water tainted; too fast, poisonous.  But the solution is never to dump chemicals into the flow as a one-time event: the process is always ongoing, constant and never-ending, so long as the mechanism itself exists.

I think that it makes a lot of sense to think of the internet in this way, since we already tend to conceptualize information networks as though they were servicing liquids of some sort.  Information “delivery” was an oft-used phrase in technical fields in the past, but due to the increased reliability and consistency of today’s information networks, it’s more common now to conceptualize information as “flowing” from one point to another.  We have increasingly begun to see information as being fluid rather than solid, in other words.

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The Creation and Destruction of Habits

August 26, 2014 By

Just for fun, I decided to try and weave a tweetstorm-style chain of thoughts through a chunk of my writing over the last few years. As you might expect, it isn’t exactly short, but at 42 tweet-sized chunks, it’s a decent feat of compression. I’ll spare my twitter followers the actual storm though.

1/ There are two kinds of stories: about forming habits, and about preserving them. Superhero movies and Christmas movies.

2/ While you have room to grow in your life, forming habits is much easier than breaking habits. Neither is easy, however.

3/ A habit, once formed, demands use. This is because it exists as a sunk cost. Disuse would imply depreciating value.

4/ A living habit generates returns and grows more complex over time. This is growth. Growing habits occupy more room over time.

5/ A dying habit generates losses and grows  simpler over time. This is decay. Dying habits decay to occupy less room over time.

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The Veil of Scale

August 20, 2014 By

There’s an old Soviet-era joke about communist notions of sharing. Two party workers, let’s call them Boris and Ivan, are chatting:

Boris: If you had two houses, would you give one to your comrade?
Ivan: Of course!
Boris: If you had two cars, would you give one to your comrade?
Ivan: Without a doubt!
Boris: If you had two shirts, would you give one to your comrade?
Ivan: You’re crazy, I couldn’t do that!
Boris: Why not?
Ivan: I have two shirts!

There are two things going on here. One is of course, the skin-in-the-game effect. The other is what I call the veil of scale: we choose small-and-local behaviors differently depending on how we think those behaviors will have emergent scaled consequences. The joke here depends on going from large-scale to small-scale questions, surprising Ivan with a question that’s real for him.

The veil of scale is about thought experiments of the form: how would you act in a situation if you didn’t know the extent to which your actions were going to be scaled?

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Structure Follows Context

July 23, 2014 By

I like mirroring principles in business a lot. My two favorite ones in business are Conway’s Law (product structure follows organizational structure) and Chandler’s Law (structure follows strategy). In conversations about business in recent years, I’ve been adding two more principles to complete a loop of sorts: market structure follows product structure and strategy follows market structure. The whole thing is what I call the data-driven death spiral, and is the reason I’ve become a partisan on the question of product-driven versus customer-driven thinking.  It operates through unimaginative leaders navigating entirely on the basis of market signals, which ultimately leads to businesses chasing their own tails. The only way a maturing business can break out of the death spiral is through the actions of a very strong leader. One capable of injecting a stiff dose of imaginative authoritah from the top.

dddspiralThat said, I’ve been sensing that my model is incomplete in a significant way. The biggest mirroring effect is the one it is easiest to miss: structure follows context. A context is the evolutionary environment (which is not the same as the competitive environment) within which a business grows, and which they shape to serve their needs as they grow. A city is the classic example of a context, but there are other kinds, such as ancient trade routes, or github (for purely virtual software teams). Contexts host businesses, but are not themselves primarily or necessarily businesses.

A context  is the sum of all history rolled up into a present-day operating environment, like a canvas with an evolving painting already on it. A new business must be painted onto some such canvas, just as software must be compiled for a specific machine. Only dictators have the luxury of razing a living context, creating a blank canvas (a dumb thing to do in almost every case).

Let’s look at the example of Seattle to see what I mean.

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Close Encounters of the Missing Kind

July 16, 2014 By

My daily routine is a strange attractor.  Every morning, I decide whether to hit one of the cafes on my regular circuit or work at the desk I rent from a local business. After lunch, and sometimes a nap, I pick a different location for my second work session. My most frequent cafe choices are as follows:

  • A downtown  cafe inside an office high-rise, patronized mainly by the herds of people who work there and ebb and flow through it, guided by the invisible pilot waves of office rhythms.
  • A somewhat dingy cafe that has some mix of locals, homeless people, tourists and what I suspect are gang members who seem to hang out there in the afternoons.
  • A cafe a few blocks from downtown inhabited by a mix of office workers getting away and a few sad people, obviously impoverished, who sit for hours nursing a coffee and browsing on cheap laptops or smartphones.
  • A self-consciously alternative cafe staffed by attractive, tattooed goth baristas, which attracts more conventional looking people apparently looking for a change of scenery, as well as the tattooed classes.
  • A rather precious hippie cafe with an ideological menu of offerings, which seems to be a crossroads for the local crunchy and nightclub sets.

If I decide to take my bike, or am in the mood for a longer walk, my range expands to perhaps twice as many locations.

There are enough cafes in my bike-accessible prowling territory that I could probably go months without repeating myself, but I don’t like either a routine that’s continuous exploration or complete predictability. A strange attractor seems to work perfectly for me. I’ve been doing this for perhaps fifteen years now, and my circuit has generally ranged from two to a dozen work locations. Home, surprisingly, has rarely been on my circuit. Home offices are really hard (read “expensive”) to get right.

It’s a lifestyle on the edge between settled and nomadic and between unsociable and sociable. I think my days of experimenting with true nomadism are over. My circuit is still more cloud mouse than metro mouse, with more big-chain cafes on it than indie, but I think I’ve become more willing to self-localize lately, and less freaked-out at being recognized by baristas.

I think a lot more people, like me, are starting to lock onto a strange attractor routine: it’s more stimulating than a regular routine, but not as demanding as full-blown nomadism. The third place is not a place so much as a pattern of movement in a socially fertile zone.

***

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The Physics of Stamp Collecting

June 18, 2014 By

Ernest Rutherford’s famous line, “all science is either physics or stamp collecting,” has bothered me ever since I first heard it. I’ve used it to make fun of biologists, and I’ve used it as a critical perspective on physics.

Rutherford almost certainly meant it as an insult to non-physicists, but there is a deeper and non-prejudiced philosophical thought underneath the dichotomy. To get there you have to ask: is there such a thing as a physics of stamp collecting?

I’ve discussed the quote once before, in my extended post on foxes and hedgehogs (short version: foxes are stamp collectors, hedgehogs are faux-physicists), but let’s dig a little deeper.

Turns out, the distinction between sustaining and disruptive variants of deliberate practice, which I discussed last week, is a consequence of the distinction between physics and stamp collecting.

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