Published on: 9 Dec, 2018
At the end of each week, we will share with you our favourite reads. We would be grateful if you could reciprocate. This week’s reads focus on decision making lessons from poker, the real software genius buddies behind Google, Big corporate and fascism, parenting in a world with gene editing is reality and Airbnb’s entry into home building. Previous editions of “Three longs & three shorts” can be accessed here
1. Long read: Three lessons in decision making from a poker champion
Authors: Liv Boeree
Source: TED talk (https://www.youtube.com/watch?v=nisSeC81u2M)
In this crisp video, poker champion Liv Boeree, tells us that there are three mistakes which poker players make which are also made by many of us in day-to-day life:
a) Misunderstanding the role of luck: if due to a slice of good fortune, you win big but then misinterpret that victory as being underpinned by your skill then you are likely to not just become more complacent/lazy going forward but also take more risk (since you are convinced that you are very skilful). This combination is likely to result in your career graph sliding. Our egos love to downplay the luck factor and that often costs us a lot of money.
b) Quantification is essential: poker is a game of probabilities and you have to train yourself to think in numbers. Numbers bring precision into our thinking. Numbers allow us to communicate precisely with other people (as opposed to using words like “probably” and “maybe” which are open to subjective interpretation).
c) Intuition is not going to get you very far: The people we are competing against are not going to use intuition to beat us. They will use careful, precise research and quantification to us. Intuition is only useful when we do the same thing thousands of time and hence the probabilities and risk-reward payoffs become second nature to us. Most investment-related activities do not fall into this domain.
2. Long read: The Friendship That Made Google Huge
Author: James Somers
Source: The New Yorker (https://www.newyorker.com/magazine/2018/12/10/the-friendship-that-made-google-huge)
No, this is not about Sergei Brin and Larry Page. James Somers, in this lovely piece in The New Yorker, talks about how Jeff Dean and Sanjay Ghemawat, two Google engineers who “changed the course of the company – and the Internet”. Part of the piece talks about how Larry Page’s idea to index the web may well have been just another idea but for the genius of these two engineers who resolved the bottle neck over what would now be considered historic four days given the impact Google has had on mankind.
“Today, Google’s engineers exist in a Great Chain of Being that begins at Level 1. At the bottom are the I.T. support staff. Level 2s are fresh out of college; Level 3s often have master’s degrees. Getting to Level 4 takes several years, or a Ph.D. Most progression stops at Level 5. Level 6 engineers—the top ten per cent—are so capable that they could be said to be the reason a project succeeds; Level 7s are Level 6s with a long track record. Principal Engineers, the Level 8s, are associated with a major product or piece of infrastructure. Distinguished Engineers, the Level 9s, are spoken of with reverence. To become a Google Fellow, a Level 10, is to win an honor that will follow you for life. Google Fellows are usually the world’s leading experts in their fields. Jeff and Sanjay are Google Senior Fellows—the company’s first and only Level 11s.”
The rest of the piece is even more interesting – highlighting how the duo despite having vastly different personalities complement each other and continue to solve some of the world’s most complex problems. It is intriguing that in a field seemingly as individualistic as software coding, working in pairs can be far more effective. Indeed, the piece cites studies which have shown examples of Picasso-Braque, Lennon-McCartney as pairs which worked in unison in art and music too.
“In his book “Collaborative Circles: Friendship Dynamics and Creative Work,” from 2001, the sociologist Michael P. Farrell made a study of close creative groups—the French Impressionists, Sigmund Freud and his contemporaries. “Most of the fragile insights that laid the foundation of a new vision emerged not when the whole group was together, and not when members worked alone, but when they collaborated and responded to one another in pairs,” he wrote. It took Monet and Renoir, working side by side in the summer of 1869, to develop the style that became Impressionism; during the six-year collaboration that gave rise to Cubism, Pablo Picasso and Georges Braque would often sign only the backs of their canvases, to obscure which of them had completed each painting. (“A canvas was not finished until both of us felt it was,” Picasso later recalled.) In “Powers of Two: Finding the Essence of Innovation in Creative Pairs,” the writer Joshua Wolf Shenk quotes from a 1971 interview in which John Lennon explained that either he or Paul McCartney would “write the good bit, the part that was easy, like ‘I read the news today’ or whatever it was.” One of them would get stuck until the other arrived—then, Lennon said, “I would sing half, and he would be inspired to write the next bit and vice versa.” Everyone falls into creative ruts, but two people rarely do so at the same time.”
3. Long read: Be Afraid of Economic ‘Bigness.’ Be Very Afraid.
Author: Tim Wu
Source: The New York Times (https://www.nytimes.com/2018/11/10/opinion/sunday/fascism-economy-monopoly.html)
This New York Times piece by Tim Wu, a law professor and the author of the recently published “The Curse of Bigness: Antitrust in the New Gilded Age”, highlights the link between two major emerging phenomena of rising populism, nationalism or neofascism and increasing economic concentration or Big Corporate. He highlights that throughout history the origins of fascism are as much economic as socio-political.
“It is a story that should sound uncomfortably familiar: An economic crisis yields widespread economic suffering, feeding an appetite for a nationalistic and extremist leader. The leader rides to power promising a return to national greatness, deliverance from economic suffering and the defeat of enemies foreign and domestic (including big business). Yet in reality, the leader seeks alliances with large enterprises and the great monopolies, so long as they obey him, for each has something the other wants: He gets their loyalty, and they avoid democratic accountability.”
“There is a direct link between concentration and the distortion of democratic process. As any undergraduate political science major could tell you, the more concentrated an industry — the fewer members it has — the easier it is to cooperate to achieve its political goals. A group like the middle class is hopelessly disorganized and has limited influence in Congress. But concentrated industries, like the pharmaceutical industry, find it easy to organize to take from the public for their own benefit”.
As the lawyer and consumer advocate Robert Pitofsky warned in 1979, we must not forget the economic origins of totalitarianism, that “massively concentrated economic power, or state intervention induced by that level of concentration, is incompatible with liberal, constitutional democracy.”
4. Short read: Bilfinger launches Youtube-style skills videos
Author: Patric Mcgee
Source: Financial Times (https://www.google.co.in/amp/s/amp.ft.com/content/9b7b6d12-f192-11e8-ae55-df4bf40f9d0d)
Bilfinger, a German construction group, has created a series of videos in response to the German working age population falling from 49mn in 2020 to 44mn in 2030. With 50% of Germany’s blue collar workers set to retire over the next five years, these videos seek to capture the skills/domain knowledge of the workers before they disappear into the sunset.
“Industrial Tube is a software program enabling workers with little experience of filming and editing to make quick “how to” videos to teach others specific niche skills built up over decades.”
Microsoft has helped Bilfinger with language recognition software so that spoken words are automatically sub-titled. Workers follow templates so that the videos are shot in snippets thus obviating the need for editing.
In the meantime, Bosch is planning to launch BoschTube in January, a learning platform for workers in the manufacturing sector.
5. Short read: Intelligence profiling opens up uber-parenting potential
Author: Anjana Ahuja
Source: Financial Times (https://www.google.co.in/amp/s/amp.ft.com/content/1a8ca076-ec25-11e8-89c8-d36339d835c0)
The genetically perfect Superwoman is pretty quickly going to become a reality to two different streams of advances in science.
Firstly, a US company, Genomic Predictions, says that it can genetically profile embryos to predict IQ, height and disease risk. Since fertility treatment often produces multiple embryos, prospective parents can then pick those with the “best” genes. In fact, parents may soon feel the moral responsibility to choose their best selves. China, apparently, has long been reading the genomes of its best students.
To understand why the Chinese are doing what they are doing (remember, this week a Chinese scientist has announced that he has produced the world’s first genetically edited babies (https://www.theguardian.com/science/2018/nov/29/work-on-gene-edited-babies-blatant-violation-of-the-law-says-china), we need to realise that each of us has a set of genomes which are slightly different from everyone else’s genomes. This is our genetic fingerprint and the points of difference between my fingerprint and yours are called SNPs. If a distinctive pattern of SNPs shows up repeatedly in the context of a disorder or in the context of high achieving students, you have the basis for gene editing and/or embryo selection.
Robert Plomin of the Institute of Psychiatry in London says that genes are the key drivers of schoolchildren’s exam results. In fact, there are around 1,000 genes which underpin “intelligence”. Plomin says that we are heading into an era of precision education where parents will do everything possible before a child is born to enhance the child’s life chances. In the future parents’ goal “might no longer be giving a child the best start to life, but instead of giving a start in life to the best child.”
6. Short read: Airbnb will start designing – and selling – homes
Author: Gaby Del Valle
Source: Vox (https://www.vox.com/the-goods/2018/11/30/18119648/airbnb-backyard-homes-samara)
Airbnb is getting into the business of providing affordable homes through an initiative called Backyard which is to be launched in 2019. “…people will soon be able to buy homes from Airbnb that can then be rented out through Airbnb’s platform. It’s an obvious win-win for the company. But for the rest of us, it’s an example of the way companies like Airbnb — which was once relegated to one sector of the economy — are increasingly encroaching on our everyday lives. Airbnb’s foray into homebuilding suggests a future in which everything is commodified and nothing, even the home, is private…Backyard buildings, designed by Airbnb’s new in-house design studio Samara, are intended to be “optimal Airbnb rentals” and could further streamline this aesthetic. To be clear, the Backyard homes — which, by the way, won’t be located in actual backyards — won’t be limited to Airbnb hosts… While that may be true, these adaptable homes will also make it easier for people to be Airbnb hosts. Not everyone has an extra room to rent out; a Backyard home’s modular floor plan could fix that.”
This initiative by Airbnb echoes what Uber and Lyft are doing with cars (leasing and selling cars to drivers) and what Tulerie is doing with clothes (let’s users rent clothes from each other). The sharing economy is going from some of us renting parts of our houses/cars with others to all of renting almost everything we have with each other!
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