Skeuomorphic Design

The first time digital interfaces came into existence, designs were quite basic. Straight lines, simple shapes and text. But soon after that, with higher resolution displays and faster GPUs the possibilities became endless.

The earliest designs in digital GUIs resembled a much of real world objects. Skeuomorphic design aims to emulate the aesthetics of physical design. This type of design was very common in the early designs at Apple. That eventually changed to a more digital-first design, also known as the flat design.

Skeuomorphic design is common in digital plugins in the audio production domain. Knobs and meters resemble the actual physical instrument.

Problem of Points

Problem of Points is a classical problem in Probability.

The setting of the problem is a game played between two. Each round of the game has an equal likelihood of any player winning. It is agreed upon before the fame that the first player to win a certain number of rounds wins the game. The proceeds, equally contributed by both players, is given in its entireity to the winner.

Now, the question is, if the game were to be interrupted for some reason, how can the pot be divided fairly.

Pascal and Fermat worked on this problem to come up with a solution. The tenets of which is what forms the basis of expected value in probability.

To keep it simple, the solution involved calculating the odd of each player winning for the subsequent rounds that were to be played. And splitting the pot based on that. While Fermat provided a logical solution to compute the final split of the pot, Pascal came up with a solution that could easily compute the pot if they were to play a certain number of rounds.

This activity involved drawing up a decision tree to map out all possibilties and their odds in an efficient way. This gave birth to whats now known as the Pascals Triangle.

The Business of Spawning

Every successful business has done at least a few things right if not many. They have to find a product or service that they are good at. Possess some characteristic that differentiates them from their competitors. Find a market to sell to. And be profitable at the same time.

Businesses in itself are a beast of an animal.

Then there is this special breed of businesses. That can not only do all of the above, but can spawn off other businesses at the same time. By spawning off, I don’t mean extending an existing product line or expanding into nearby verticals. But building entities that are not in their primary field of expertise and building them into independent businesses.

Amazon is a good example of this. Starting from selling books online and expanding that to other verticals is quite logical. But the spawning off of businesses like Amazon Web Services, Amazon Prime, Kindle, not quite. But that did not come for free.

There were 2 major factors that enabled them to do this. Access to capital and ideas for businesses that have the possibility to return high ROI. Internet based businesses have a very high ROI, given the low investment required.

Having both access to capital and serially trying one idea after an other is a deliberate effort for sure. And the more tries you get, higher the chances of success.

Judging Decisions

A note on decision making. A decision is good or bad not based on the outcome but based on what information was available at the time the decision was taken and what heuristics were applied to reach a particular decision. Tweets like these are quite common. “If you had invested 10$ in X 10 years ago now you would be a millionaire”. And that is evaluating a decision based on its outcome. But what you should be thinking is what information did you have then, what was missing, what could have been predicted given the information you had, what mental models and principles were at play and why that happened. This kind of thinking is crucial to improve how you think and to make it better. Dwelling on your past decisions for most is a more tiresome exercise than a fruitful one. To apply this without messing it with your head requires a good amount of self-awareness and discipline.

Comparative Advantage

Comparative advantage describes how trading parties will choose to produce more of a good that they have a comparative advantage of, and use that to trade for other goods that they don’t have a comparative advantage in. Comparative advantage forms a foundation for international trade.

Comparative advantage is why there are call centers in India, manufacturing in China and highly specialized capital intensive labor in the US. It makes sense for China to do all manufacturing electronic goods and trade it to other countries that are specialized in producing other goods.

Conversely, an oil producing country will have a cheaper access to raw material for chemical products. They have a lower opportunity cost of producing more chemical products compared to countries that do not have access to cheap raw materials. This drives more chemical production in oil producing countries.

However, there are cases where countries, governments and business lobby together to protect niche interests. This can effectively keep foreign, cheaper goods out of the market to protect domestic businesses. However, in the long term, this might not good solution as neighbouring countries will be better off as they have to spend less to get the same goods.

Parimutuel Betting

Parimutuel stands for mutual betting. All the bets of a particular type are placed in a pool after deducting the house cost. This kind of betting is different from fixed-odds betting in that the payout is not known at the time of placing a the bet.

The payout is determined after the event has taken place and the pool is split to the outcome sustained. This kind of betting is common in horse racing.

An important innovation in this betting system was the introduction of a Totalizator. Nowadays, these are computers. A totalizator read the current pool and betting spread and calculates the odds and payout and show it to the public. This encouraged even more betting as it gave a feedback to the ones betting.

Pricing Power

Pricing power allows businesses to price their product or services higher than the rate of inflation and that of the competitors without reduced sales. Pricing power can come from a few ways. A very high quality product. A patented efficiency or feature of convenience that competitors cannot match. Or when a business is operating as a monopoly and barrier for entry is quite high.

A key indicator of the strength of a business is its pricing power That said, it does not mean that if a business does not have good pricing power it is a bad business. However, the opposite has a much higher probability to hold true.

In some businesses untapped pricing power is a good indicator that it is mispriced by the market. To reach such a conclusion one must have an idea on the costs and margins of that particular business against the backdrop of it’s competitors.

High pricing power can materialize as high ROIC over the years. But keep in mind that, high ROIC can be a result of many other factors. Operating and gross margins also provide an indication of the pricing power a company has.

Gini Coefficient

The Gini Coefficient is a statistical measure of dispersion. It is an indication of the spread of data similar to standard deviation and variance. In economics, the Gini coefficient is used to represent the income inequality within a demographic.

This coefficient was developed by the Italian statistician Corrado Gini. The Gini Coefficient can be calculated for both continuous distributions and discrete data.

Over the last century in developed countries, there is a trend of increasing inequality. While in developing countries, this is a decline in inequality since the 1980’s. THis can be attributed to all the new jobs created due to technology and globalization. Countries following the nordic model tend to have a lower overall Gini coefficient.

Gini’s coefficient is used in other disciplines. For example, it is used in ecology as a measure of biodiversity in a region. In health, it is used as a measure of inequality of health related quality of life in a population.

Flynn Effect

The Flynn Effect is the increase of intelligence test scores over the 20th century. The IQ measure is measured around 100 and their standard deviation on either sides. Over the years, the mean is adjusted based on the sample population and it is observed that the mean shifts upwards a few basis points.

There are a few explanations as to why this is a trend.

Total schooling time has increased steadily over the years. This means that kids would have had more chances to practice their analytical and cognitive skills.

Tests similar to IQ tests are used in a lot of scenarios. The familiarity of such tests has grown.

There is a more stimulating environment while kids are growing up now vs. back in the day. More video games and television stimuli. There are studies that show better cognitive activity and hand-eye coordination among those who game more.

Nutrition, both in quantity and quality has improved over time. There is data that suggests that the brain is ever so slowly growing as well with the improved conditions.

Better health conditions. Developed nations in general are more equipped to handle infectious diseases. Vaccinations are part of everyone’s growing life.

Light Sails

Light sails, aka Solar sails is method to propel a spacecraft using light. The light from the Sun exerts a radiation pressure on these sails that accelerates the spacecraft. However, the magnitude of force is quite low. A sail of dimensions 800m x 800m will experience a force of about 5 newtons at Earth’s distance from the Sun.

What exactly happens is that only a fraction of the photons that hit a light sail is reflected. Some of it are absorbed. And this causes a transfer in momentum from the photon to the light sail. For the momentum to be of any considerable value, there has to be a lot of photons and the light sails have to be as light as it can be.

Omuamua is the first interstellar object detected as a passing object through our solar system. Interstellar, meaning that it originated outside our solar system. These objects are hard to detect before-hand that we can be ready to send a spacecraft behind it. In addition to that, the speed of these objects are quite high to keep up with conventional propulsion methods. Light-sails could be a good candidate for probes that can be used to patrol the boundaries of our system for such objects in the future.