What is it?
Action bias is a tendency to do something in a situation due to factors like to gain a sense of control, social norms, peer pressure etc. We feel compelled to act even if there is no evidence that it might lead to a favourable outcome. Taking a decision without processing all the information might lead us to take less effective action. In the society, the general bias is against inaction. It gives an impression of not doing what is necessary or not putting in the effort. Against that backdrop, taking premature action might look much better than it actually is. This bias can be considered as a survival instinct. Our innate instinct to hunt, find shelter have carried over despite the very different environment and lifestyle today.
An example of this bias is when a person would choose to take a medical treatment as it is better than no-treatment at all. Even if the treatment haven’t yet been proven to work. In meetings and conversations, we have a tendency to “say something”. It doesn’t have to actually add to the conversation but it gives a sense of contribution nevertheless. Charlie Munger calls it the Say Something Syndrome in his famous talk. This is common in investing too. Activity from your peers, general market sentiment from news, market activity all can lead to suboptimal action.
The popularity of newsletters have really taken off this year. More and more creators have identified newsletters as good way to maintain an online presence. Niche creators have turned to newsletters to build an audience. A renewed realization that an email list still works as a good marketing lead generator. The concept that a 1000 true fans are more valuable than a 5 or 6-digit subscriber count. The infrastructure and tools have become common. More democratized and accessible. Newsletters have also become a channel for monetization. The classic ads and affiliate links work. They also become a good channel to market own products and services. Paid communities tied with newsletters are becoming more common. Newsletters give a taste of the kind of community they are trying to attract, for example the Farnam Street Learning Community.
Hygge is a Danish lifestyle centered around coziness and well-being. Acknowledging the present moment and enjoying it is Hygge. The word Hygge comes from the Norse word hug which means soul, mind and consciousness. Now hygge is considered as a core part of the Danish culture. A laid-back feeling appreciating the small joys of life. As opposed to hustle culture, Hygge is about taking it slow and eliminating any sources of stress. Multi-tasking is a big no-no. Lighting candles or a fireplace, indulging in sugary treats, enjoying a cup of coffee are the most common practices considered as Hygge. Hygge can be an informal gathering, quiet, low-key, mellow conversations.
Fiverr is a web based platform that allows freelancers to offer their service to individuals and businesses. Anything ranging from simple services like a logo design to something more complex like SEO marketing. Fiverr’s business model is known as Service-as-a-product. They provide a platform to effectively productize a service. This year Fiverr stock price has appreciated by 678%. The pandemic has led to a lot more in-house time for creatives, engineers, developers alike. The number of people trying to start a online business/presence have skyrocketed and has led to the increased demand for one-time one-off services. Fiverr currently has an Alexa Rank of 195, up by over 100 spots in the last 3 months. In terms of revenue, the company seems to be leading by a margin in this space.
Recently, Fiverr launched Fiverr Business which is a subscription based model allowing organizations to manage freelance resources. In a way, it doubles as a large pool of consultants who can be used as resources for projects. More ad-hoc and more varied in terms of talent and competence availability. Saving a lot of time from recruitment point of view. In my opinion, that’s genius.
A system of data-manipulation rules is said to be Turing complete if it can be used to simulate any Turing Machine. A Turing Machine is a mathematical model of computation that defines an abstract machine which manipulates data based on a set of rules. The actual machine invented by Alan Turing in 1936 was based on a tape with symbols and a machine that scans it. The machine is also capable for writing symbols. This became an early version of a central processing unit. In simple words, a Turing complete system is one which you can write a program that can find an answer. A Turing Machine can solve any problem that can be coded. Most programming languages are Turing complete. Even software like Microsoft Excel and Powerpoint are Turing complete. A blockchain can be used to solve problems by embedding a scripting language that can utilize the distributed nature of a blockchain.
A piece of content that changes everything. A new idea so revolutionary that changes the worldview on some topic for a large group of people. A revelation or “leak” that has second and third order effects on the world. Or something simple. A blog post that actually gets you over 1000+ visits and a shoutout in NYTimes. It can go bad as well. A piece of content that stirs up a controversy leading to multiple lawsuits.
The coming years we will see more of this. The nature and scale of the internet will make this phenomenon frequent but still rare. It will be harder to spot from all the clickbait content out there. However it will be very clear to point out in hindsight which piece of content changed the course of our collective thinking.
The best user interface is the one that no one notices. It should just melt away in it’s function. It should get out of the way rather than pose as a hurdle to cross to achieve something. Reducing the number of clicks for each operation is a good start. Making the response time really fast (sub 100ms) also helps. But these are just tricks. What really matters is the overall concept. The concept of what needs to be shown and what can be hidden. What is really necessary for the user?. What can be defaulted or figured out in some other smart way? Visibility is key. Whatever is shown on the screen should be easily understood and discernible. Unlike the new Google icons. Colors convey a mood. A combination of colours and movement can convey an emotion.
Extrapolation bias is a tendency to take recent experience and project that it will continue into the future. We tend to think in a straight line. And it is very hard for us to imagine or perceive future anomalies. A most common way this occurs in finance is when valuing a company. If the company had a 25% earnings for the past 3 years, we are easily drawn to choosing the forecast value for the coming years to be 25% as well. But that is far from certain. The ability of a business to create value in the past does not readily influence it’s ability to do the same in the future. It is the same as correlating a coin toss in the past to another one that is going to take place. Here, we know that the previous coin toss outcome does not influence the nest one. The worst part of this bias is that it is very easy to take a decision with an underlying assumption that the status quo will be maintained in the future.
There are 2 kinds of tutorials. The first kind is the one that gives you the fish, and the second kind is the one that teaches you how to fish. During development, I have caught myself facing the same errors even after looking up a solution to a problem on stackoverflow. Understanding the framework and the problem in question is key. Tutorials failing to do that fall into the first category. One of the most efficient ways to learn something is by doing it and seeing it for yourself. The second kind of tutorials are really good at hiding the “actual” doing part within it’s tutorial. Making it more of a learning session rather than just following a set of commands on the terminal, just to forget it the next time.
Operating a business incurs many expenses. But what if there is a way to turn those costs into a revenue. Amazon realized this quite early on. They have successfully turned most of their expense line-items in their income statement of 2005 to revenue generating products and services. Since Amazon were one of the first to explore and grow in the e-commerce space they had a considerable advantage in understanding what were the necessary operational services that were missing. Fulfillment of orders turned into Fulfillment by Amazon. Marketing in a way has become Amazon Prime. Backend servers and infrastructure has become Amazon Web Services. Payment Processing has become Amazon payments. And now they sell these products and services in almost all verticals and geographies. Productizing internal operations and scaling will become more common with enterprise software in the coming years.