Vivid Curiosity

If you flip a fair coin and it comes up heads twelve times, what is the probability of it coming up heads the thirteenth time? 

Well, you’d tell me, it’s fifty fifty just like the previous twelve flips. And as statistics teachers say all the time, “the coin doesn’t remember that it came up heads twelve times before.” They say each flip is “independent” from one another, and from there on out we base a buttload of the statistics world. (Probably more than a single butt at that). 

But what if the coin remembers?

Meaning what if there isn’t independence? What if each time the coin comes up heads the next time it is more likely to come up heads again? So if it comes up heads 99 times, it is very very likely to come up heads for the 100th flip. Doesn’t that change all the rules? And what if when the streak is broken, it goes back to 50-50? It means we can see huge streaks that simply flatten out and die. Or worse we can see several big streaks move in one direction and then precipitously drop. And all this volatility would be normal.

So, moving towards my point, one of the many buttloads reliant on ‘independence’ include to many “real world” situations such as finance, stock prices, economics and forecasting. And what happens to our models when things aren’t independent? 

What happens when we have herding? What about network externalities? What about something being cool? For some period of place and time, for every person who buys an iPhone, the next person is slightly more likely to buy an iPhone?

It’s a good idea to diversify when you invest. But exactly how much diversification is there when Asia’s economy is largely dependent on the US economy? It’s really nice that everything is online and it makes life easier. So you keep betting heads and put everything you can online. But what happens when the internet is down or there is a power outage? Is it worth the everyday convenience only to be uber-screwed once in a while? Don’t we get lulled into this false sense of security? Yes, if the coin actually remembers, then every once in a while we get to be unpredicably uber-screwed.

Sounds a bit like what might be what might have happened before this market crash right? False sense of security and prosperity? 

**I’m not suggesting this is the sole cause, but I do think a lot of people took hidden risks, or weren’t fully accountable for the risks they were taking.

So this has come up a bit lately, and it has always been a pet peeve of mine so I’m doing a quick blog post in the middle of my work day.

STOP WASTING TALENT. You probably have a lot more talent around you than you realized. That intern in the corner? Probably could do more than watch videos all day, waiting to be assigned work.

This goes beyond interns and entry level as well. Everyone seems to be either unemployed or absurdly busy. It’s a good time to see who can step up and who can’t. Go give people higher level work, , make people stretch a little, just try to minimize the busy work. 

Challenge everyone to be better, not just busier. It’s also a good time to see if you’re a leader, or just everyone’s boss.

The converse of this, is to make sure you’re not asking an unsustainable amount of work from your employees… but that’s at the other end of the scale and a post for another day.

And they say advertising is dead. So not true. Thank you to my friend Sarah Dryden for finding and sharing this. It’s one of those live ads that are just so cool. Not sure if they sold any new phones that day, but it was some major brand building and drove tons of traffic to their youtube page and probably other campaign pages. As Sarah put it “Thank you T-Mobile, and Saatchi & Saatchi for making life joyous, even when you’re trying to sell something”

I also really enjoyed the “Making Of…”

My thoughts:
I love how it starts with just one person and slowly spreads. Out of the 400 hired dancers, I would say 100 more joined in spontaneously. And like most things in life, what seems to natural and graceful involved a lot of practice, patience and hard work. I also love the documentary style it was shot in. Very different feel than the xbox commercial I posted a in Sept. I hope Saatchi & Saatchi have a good campaign to back up this great piece.

This came up on Twitter not too long ago, but I’ve been thinking about it. The idea is that you should only have 3 goals to focus on as a company. Everything with high priority should be working towards those 3 goals. I suppose the trick is to not making those 3 things too broad (ie, be profitable), but I’ve been having a hard time setting just 3.

What I like about my work is that it doesn’t reside in a single silo, I end up working throughout various parts of the company. But the hard part is I can’t even come up with one goal per department. Or if I do I end up with three lopsided goals, one being far more broad or far more important than the others. The same is true for my personal life–in fact I’ve made 3 overall goals for myself that encompass personal & business aspirations, but it wasn’t easy.

So here’s a short little list I have to help guide my goal setting. 

• Edit your list. You can start with more than 3 goals that are important to you, but realize you’ll have to cut some out (not  merely combine them into some sort of uber-goal)
• What is most dire? I know everything needs improvement, but what key areas will give you the most bang for your buck? (Often times it is those weaknesses we’ve been avoiding for so long)
• Feed your goals. Treat your goals like a new plant or pet (pet goldfish do count for those of you with allergies). Don’t forget to feed them, give them time and nurture them. Don’t forget to change your schedule to suit your goals
• Publish or Perish. Publicize your goals, tell people about them, post them on the fridge (or better yet your office door). If you tell people, you’ll be less likely to let them go. Especially tell people who will ask you about them

Many internet companies, especially content driven companies that are free services monetized through advertising, tend to subsidize third world users. These users can make up a bulk of a site’s traffic, but create very few monetization opportunities. Friendster for example is huge in the Philippines, and their plan for US & European advertising dollars has gone out the window. There’s also Orkut, which is big in Brazil.

This subsidization is espeecially true if a site has just enough US & European traffic (or traffic that comes with high paying advertising dollars) that the users from the developing world are overlooked. Because if you’re friendster you have to make a tough decision on hatching a plan to either attract more traffic from US & others, or how to monetize with traffic from the Philippines. If you’re scraping by already, it’s tempting to overlook the stream of traffic that doesn’t pay for itself.

When growing a company you’re always being asked (or at least you should ask yourself) will this scale? Will this process that works for 20 or 30 customers work for 50? For 100 or 300?. 

In a recession, the question is does this downsize? If your company shrinks, does your process shrink downward? How do you shrink products or services that are no longer in demand? Can you nurture sectors that are growing?

Oh, and do you have someone watching your customers like a hawk? This is when customer habits, taste,attitude, loyalty and socioeconomic status change.

Flying into work yesterday morning I was surprised to see Zappos at the airport. More specifically, in the shoe/stuff tray at the security line. I snapped a photo on my phone after I got through security, yes the officer looked at me a little funny.

I really like this, it fits into Zappos’ brand personality. It’s fun and a little quirky. Also perfect for the holiday season.

So what’s the best thing to do during a global economic depression? Oh I know, you could launch an ad campaign where the lone calorie in your diet soft drink commits suicide. Not only it sound morbid, the ads depict the single calorie trying to off itself in multiple ways at a time. 

Blech

Supposedly, just about all “100 percent of the nearly 300 million turkeys produced annually in the United States for consumption are the results of artificial insemination.”

This makes you wonder, why so much turkey? It is probably almost exclusively for Thanksgiving, but still. There can’t be that many people who love turkey, otherwise we would see more turkey burgers, wouldn’t we?

The Wall Street Journal writes about how the Latvian government detained a economist for issuing gloomy economic forecasts. That’ll definitely avoid a run on the bank…

RIGA, Latvia — Hammered by economic woe, this former Soviet republic recently took a novel step to contain the crisis. Its counterespionage agency busted an economist for being too downbeat.

“All I did was say what everyone knows,” says Dmitrijs Smirnovs, a 32-year-old university lecturer detained by Latvia’s Security Police. The force is responsible for hunting down spies, terrorists and other threats to this Baltic nation of 2.3 million people and 26 banks.

Now free after two days of questioning, Mr. Smirnovs hasn’t been charged. But he is still under investigation for bad-mouthing the stability of Latvia’s banks and the national currency, the lat. Investigators suspect him of spreading “untruthful information.” They’ve ordered him not to leave the country and seized his computer.

Finance is a highly touchy subject in Latvia, one that the state tries, with unusual zeal, to shield from loose tongues. It is a criminal offense here to spread “untrue data or information” about the country’s financial system. Undermining it is outlawed as subversion.
http://online.wsj.com/article/SB122809308553167889.html