Male ants are useless – excerpts from EO Wilson

All ants you see at work, all that explore the environment, all that go to war (which is total and myrmicidal) are female. Adult male ants are pitiful creatures by comparison. They have wings and can fly, huge eyes and genitalia, and small brains. They do no work for their mother and sisters, and have only one function in life: to inseminate virgin queens from other colonies during nuptial flights.

At first, most serve as attendants of the queen mother and her brood, from eggs to larvae and through pupae to newly emerged adults. Next they engage more in nest repair and miscellaneous other internal tasks. Finally, they become prone to service outside the nest, from sentinel to forager, to guard, to warrior. In a nutshell and put more plainly, where humans send their young adults into battle, ants send their old ladies.

Source: https://www.amazon.com/dp/B07ZTTV17B/

Podcast notes – Lia DiBello on business mental models

I mostly publish podcast notes directly to Twitter these days, but when the notes aren’t well suited to that format I’ll continue to share them here.

Host: Cedric Chin @ Commonplace Expertise
Guest: Lia DiBello (LDB) – cognitive neuroscientist / business consultant

Concept of strategic rehearsal – how to accelerate acquisition of expertise in different industries

LDB – obsessed with cognition, expertise
4th generation entrepreneur family
“Business is cognition in action”

Cognitive agility is the new basic skill
Humans never stop changing
We actually grow new neurons all your life

In business, you can tell if you’re successful or not, good way to test & validate science

2008 NSF study – companies have similarities, business is a closed system like chess
Chess masters are all extremely different, but play with same boards and pieces, and they recognize other masters
What makes business superstars superstars?
Who are one trick ponies, and who does well even in down markets?

Businesses only have 3-4 organizing forces
Talented people are very good at managing / organizing these forces

Each force can be complicated by and affect each other
1. Capital market – access to capital
2. Market (Demand)
3. Supply environment

A “One trick pony” leader is usually good at one leg but not all 3 – and usually that’s sales

Most transferrable skill is capital (#1) – availability of cash, how capital markets work

Hardest leg is #3 supply (operations)

CC – “The Outsiders” – Thorndike – profiles CEOs who are good capital allocators – every single one had a strong operator as second in command

“Business expertise is a form of distributed cognition”

Examples
-Biotech company where person who really understood the problem was in the wrong role
-CEO who saw financial crisis coming, but all of executive team had blindspot

In Europe, older / more established cos have important aristocratic and family connections – but often business acumen is lacking

We really don’t know ourselves
We didn’t evolve to have self knowledge – probably what keeps us going every day

Developed tool – Profiler – to collect data on individuals and teams – online business cases that they work through, simulate scenarios as CEO, predict outcomes
People who don’t do well at these predictions tend to be weak in one of the 3 legs

In their work w/ clients —
Problem is usually not what they think it is
Opportunity (upside) is usually larger than what they think it is

Client work – Drug company thought they needed more drugs in pipeline
They found that pipeline wasn’t issue, it was bench chemistry / science – was really inefficient – automate some of earlier chemistry, have talent work on later stage work

Client work – Midwest foundry – believed problem was China – recommendation was to focus on the things that China can’t do, focus on specialty business
Did strategic rehearsal – gamified it – use ERP system, only make what you can sell, and must be on-time
Many didn’t understand concept of lead times, and were just making things to seem busy, didn’t understand costs of unsold / over made stuff
Effectively taught them principles of just-in-time manufacturing

We operate with a dominant framework – theory of mind – your brain on autopilot once you get good at something, saves energy
Shape of schemas is determined by environment, education – people who work together share common schemas, goal driven, look around and learn from others
SR interferes with those pre existing schemas – build environment that has high symbolic density, force you to make lots of decisions, 15 minutes with 60 decisions, doing it as a group, no time to stop and think
Autopilot takes over, replicate your bad habits, mistakes – it hurts to experience this so viscerally
Next day, start over from scratch, super dis equilibrated, no longer on autopilot, now new better ideas come to fore

Piaget – genetic epistemologist – levels of expertise emerge like a biological function, assimilate + accommodate, expand repertoire + schema, organize implicit theory
Vygotsky – all knowledge formed by culture, Marxist, shaped by social environment, memorize thru language all the concepts, practice / dialectical process with others to develop meaning and deep understanding

Expertise is in middle of these two

If you go to baby, first concept is grasping – it’s first malleable concept – one finger is ok, two fingers is surprised, then squeezing gets used to it, then three fingers, etc
All our concepts start with our hands, working with them

What’s general form of strategic rehearsal
-Knowledge extraction
-Extract default model
-Pick a goal to construct the right mental model
-Look at financial indicators – compare to competitors – where is it underperforming – identify the problem / constraints and remove them and see what potential outcome would be
-13 proprietary factors

re: Diversity training – lectures and quizzes don’t work – but simulations with immediate feedback work much better (shown that it takes just 45 minutes to change behavior!)

Recent Twitter threads – Worldcoin, Metaverse, Balaji, Zoltan Poszar, and Doodles

I’ve been posting podcast notes directly to Twitter in an effort to grow my following. So far I’d give it a straight B as a marketing tactic.

Anyway here are the threads I’ve shared the past week — all podcast notes.

Worldcoin CEO on Epicenter podcast:

Legendary game designer Raph Koster talking about metaverse:

Balaji on the Farnam Street podcast:

…and part 2

Zoltan Poszar on Odd Lots talking about Bretton Woods 3

Doodles founder poopie on Overpriced JPEGs podcast

Podcast notes – Hasu and Su Zhu on the Sovereign Individual – Uncommon Core

Last few months crypto lull
Growth tech stocks doing poorly
General washout

Now back to idiosyncratic crypto world
Equities bounced off lows
Are we entering stagflation? Or road bump to secular deflation?

Tech is long duration, story about future
Bonds and fiat are locking in huge losses

Investors realize they have to own growth, can’t sit in fiat or bonds, commodities prices will correct

Regardless of recession / stagflation, world can’t turn away from tech
Longer term, people will allocate fixed % to crypto, and this % will grow

Rare that stocks and bonds go down at same time – happened in 2008
Only natural bond buyer is pensions – fixed annuity
Otherwise it’s just Central Bank – Europe, Japan, US – scary long term because it means government is lending to itself
Only works in secular deflation environment
Technology is wage dis-inflationary

Inflationary spike becomes dis-inflationary because it forces businesses to change, adapt more technology, reduce labor – eg, like ordering food from tablets instead of waiters
This will only accelerate as boomers retire – some think this will be wage inflationary (labor reduces) – but it will be opposite because tech Overton window will open, bring more tech to increase automation / reduce need for labor
We will see this in every industry

If people wanted, they can live very cheap lives – like in Japan
Demographics are also deflationary (slowing population growth, birth rates)

Inflation will top Q2 (2022)
Govs want deflation now, by crushing demand, scaring everyone
They don’t think we’ll still have inflation in 3 years – they know it’s transitory

Stagflation = economy slows, recession, but there’s still wage and price growth
1970s similar environment – oil + commodity spike
Stagflation is dangerous – lots of mortgages + job destruction + rates cycle

Today’s different – less labor entering workforce
Many commodities can be substituted – eg, if gas prices high, people don’t go to movie theaters, etc
Media likes to talk about inflation, good for engagement / clicks – but secular deflation is harder to understand (even though reality in Japan for 30 years)

We won’t enter recession unless Fed forces it
Also will be massive easing in Japan and China

China has massive deflation problem coming – inflated house prices, shrinking demographics, no immigration – must print a lot of money to prop it up
Only question – can they handle rising food prices?
Given reliance on fertilizer which Russia controls

Crypto is entering big leagues now
But still too small for macro to really matter

Ukraine-Russia – no one can argue how speculative crypto is now
Net good – Ukraine using it, people can save wealth and escape
Most people view world as what “should happen” and what “shouldn’t happen” – should Putin have invaded? Etc
Better to focus not on “should”, but on what WILL happen next – and clearly crypto is out of bag

Also crypto in Middle East – parallel system of finance
Benefits of credibly neutral systems
Geopolitical moves – instead of what should happen (“should crypto be adopted and used”), it’s a rational response to what is actually happening in world, and expected outcomes

We sanction people because we can’t arrest them – eg, Russian oligarchs
Suspension of rule of law in pursuit of higher purpose
What are the lines we can’t cross? Eg, we can’t kill dictators’ children
These depend on norms
Crypto can be used for sanctions too – there’s no tech that’s useful for people that ISN’T useful for criminals
Precarious subject since governments are actively writing crypto rules and regs right now
Each society will answer differently based on priorities
For example, India still buying Russian oil bc it’s a life or death necessity, and believe America is hypocritical because even America doesn’t follow its own sanctions (eg, still buying Russian oil too)

Short term, America / Ukraine will win
Long term, other countries will move away from dependence on existing financial systems, embrace alternate systems / credibly neutral

West will continue to adopt crypto as freedom of values, speech
Governments outside west will also adopt – credibly neutral money + platform

“Crypto will become all the things”
Mega-political force – peer to peer encryption – not ban-able similar to how printing press isn’t ban-able
500 year epochs enabled by tech transitions
Printing press attacked power of Church, Church tried to ban it but ultimately failed

Hasu – “Printing press as disintermediating technology”

Now we’re seeing this with p2p internet encryption
US military said it’s military grade tech, we should ban it

Sovereign Individual – as we enter information society, work and value will be increasingly on internet, and nation state monopoly on violence / control will weaken
Where you’re born will have less claim on your productivity
Very disruptive to large governments

Hasu – Nation state is one of great innovations in world history – but today, would be great to have more competition / experimentation

People will move to places advantageous to self (eg, low tax), or with others they met online, setup their own communities

Generational gap never been bigger – older generations are shocked you can form these strong bonds online
Some older guys think internet is actually net-bad
But for young, all their social moments happen online
This pluralism will blow peoples’ minds

Hasu – need one country with free land to allow establish charter cities

In Japan, average age of farmer is 67, you can get free land if you move there and develop the land

China supporting more relaxation, less testing, less stress among young
See the troubles if stress / pressure on youth continue

Dubai – their biz model is sell land to foreigners – almost like metaverse – zero tax on everything, but I want you to buy land here – like a token gated community
Compelling flywheel – freedoms of a liberal monarchy
Monarchy which has business model to attract talent and capital

Liberal democracy promise is everyone gets a voice – but then majority tyranny over minority (eg, poor over rich, dominant ethnicity over ethnic minorities)
Nordic models seem to work

Peru – Fushimori abolished Parliament, very popular move with people who thought Parliament was corrupt and ineffective – transitioning democracy back to authoritarian / monarchy

Ethno-states will be on rise – only way people willing to sacrifice for nation

Crypto abstracts away idea that you must save in your native fiat – but instead save in common with global like-minded individuals

If huge institutions were buying and staking crypto, would almost be anachronism – individuals have been buying these dips, pushing crypto forward
Interesting end game – what are people doing to transact with each other, secure their own wealth? How will governments react to people doing this?

“Back to first principles”