Hey everybody,
First… some exciting news to share with you.
The article I published last week, What the Hell is Going On? is officially the most popular essay I’ve ever written. On Sunday, it climbed to the top of HackerNews and was read by more than 50,000 people.
To be honest, I don’t care about page views that much. I care about reaching people I admire much, much more. That’s why it was so fun to see people like Steven Sinovsky, Josh Elman, Patrick McKenzie, and Kevin Simler share the essay. Combined, I’ve spent countless hours reading their work and it was nice to finally share something with them.
Amazon: The Internet Inversion
I love learning about Amazon. The company operates so efficiently and so intelligently that it feels like an anomaly. Here’s one example: As Amazon grows, it’s innovating faster and faster.
To understand Amazon's brilliance, you have to understand how the company deals with growth bottlenecks. Conventional wisdom tells us to pump more resources at problems. People. Money. Time. You name it.
But Amazon does something else. Amazon has historically applied the same three-step solution to many of their growth bottlenecks:
Determine which internal process or resource is the bottleneck
Realize they can’t possibly develop and deploy enough resources internally to remove that bottleneck
Remove the bottleneck by building an interface to allow the broader market to solve the problem in mass.
This three-step solution is responsible for Amazon Web Services, Amazon Marketplace, and Amazon Catalog API.
I call this “The Internet Inversion.” It flips conventional wisdom on its head. By opening it’s internal services, Amazon solves a collection of problems at once. Instead of choosing between growth and innovation, they find ways to choose both.
The best companies increasingly leverage the scale of the internet. For example, you help Google’s image recognition software whenever you confirm that "you’re not a robot.” When you click those boxes, you train the algorithms.
The Internet Inversion permeates my own strategy. Without asking, Monday Musings subscribers and people with anonymous Twitter accounts edited my What the Hell is Going On? essay before I even asked.
Early on, I saw the inefficiency of most networking events and job applications. Instead of going outbound, I started writing on the internet, which attracts in-bound opportunities. Whenever I have a problem, I ask: how can I leverage the scale of the internet?
When a problem presents itself, consider the The Internet Inversion.
(Note: Zack Kanter deserves all the credit for this idea. I recommend his essay, What is Amazon?).
Fresh Ideas
New Podcast: Nick Kokonas
You’re gonna like this one. Nick is the coolest person I’ve met in a long, long time.
He’s the founder of Alinea, which has been named the best restaurant in America and the best restaurant in the world. He is also the founder and CEO of Tock, Inc, a reservations and CRM system for restaurants with clients in more than 20 countries.
He’s witty and hilarious, and in this episode, we talked about:
Behavioral economics in the restaurant industry
Dynamic pricing
Restaurant branding
Designing quality experiences
High-end dining in Argentina
You can listen to the episode on iTunes and Spotify.
New Article: Why is College so Expensive?
While writing What the Hell is Going On, I got side-tracked and learned all about why college tuition costs are rising. Ultimately, it boils down to two theories:
Baumol’s Cost Disease
The Bowen Rule
I got into the weeds here. The more you like detail, the more you’ll like this post.
Coolest Things I Learned This Week
The Power of Writing Online
From a dainty little article called Good Things Come to Those Who Write:
"Writing is how you get attention.
And in todays world attention is the most valuable resource. Major companies spend billions of dollars on advertising each year in order to interrupt people for a chance at getting attention for their products.
Writers get that for free. They have tens of thousands of people raising their hands to say, “Sign me up. I want to read everything you write. You have my attention.” Then when the writer uses a small portion of that attention to promote something else that will benefit the reader, hundreds or thousands of them buy it. Writers can gather attention better than anyone else.
And in today’s business world, attention is the most valuable resource.”
Douglas Abrams’ Rules of Technology
The Wisdom of Crowds
There are four conditions that characterize wise crowds:
Diversity of opinion (each person should have some private information, even if it’s just an eccentric interpretation of the known facts)
Independence (people’s opinions are not determined by the opinions of those around them),
Decentralization (people are able to specialize and draw on local knowledge)
Aggregation (some mechanism exists for turning private judgments into a collective decision). If a group satisfies those conditions, its judgment is likely to be accurate.
If you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out.
Each person’s guess, you might say, has two components: information and error. Subtract the error, and you’re left with the information.
Brian Koppelman: How to Speak to Powerful People
Love this:
"Don’t treat them with a sense of awe, but don’t be condescending and say you’re the smartest person in the world. And the biggest thing is to make them laugh once in a while.
Walk into the room, make them laugh, make them feel like you have the answers to their problems, and that you’re comfortable in your own skin. An ingrained sense of comfort in your own skin... find a way to sit in the room relaxed.”
The Magic of Platitudes
“A platitude is precisely what is left of a truth after it has been drained of all emotion. To re-saturate that dried husk with feeling is to see it again for what it is: the loveliest and most deeply rooted of truths, hidden in plain sight.”
— Michael Pollan
The Virtue of Humility
Krista Tippett is one of my favorite interviewers. Her On Being podcast is exceptional. She interviews poets, philosophers, and authors from all corners of society, and she’s informed my interviewing style in countless ways.
I’m on a deep religion and “what is the meaning of life” kick right now, so I’ve been reading her book, Becoming Wise. I particularly enjoyed this section on the importance of humility.
"Humility is a final virtue to name and beckon here. It is woven through lives of wisdom and resilience. It’s another word that has acquired a taint of ineffectuality. But my life of conversation has reintroduced it to me as a companion to curiosity and delight. Like humor, it softens us for hospitality and beauty and questioning and all the other virtues I’ve named in these pages.
Spiritual humility is not about getting small, not about debasing oneself, but about approaching everything and everyone else with a readiness to see goodness and to be surprised. This is the humility of a child, which Jesus lauded. It is the humility of the scientist and the mystic. It has a lightness of step, not a heaviness of heart."
Photo of the Week
I snapped this photo with Nick Kokonas in Chicago in early February, right after we recorded a podcast together. We spent 90 minutes recording and another 60 talking about two of our favorite things: golf and food. The smiles say it all: we had a blast!
Enjoy the podcast. And thank you for reading.
Until next week,
David Perell