Network effects: hidden and in plain sight

Social networks tend to be free to use, because every additional user strengthens the system. A paid tier with exclusive features often don't work because holding back features makes the free product less useful, and every user lost is very bad for the network. 

Products that are built with machine learning are similar, except the network effects are hidden. The data generated by each user can be used to make the system better, and, in general, whoever has the best data, wins.

A paid-only subscription to one of these products will typically result in a worse product than a freemium model, and it's likely that a totally free model will be even better. The exception is when an important group of users feels compelled to pay to get the best product. For example, business users purchasing software. In this case, freemium is the way to go.

Helping teams nurture a growth mindset

Angela Duckworth talks about the KIPP teaching thesaurus in Grit. Turns out that the wording teachers use can dramatically affect how students see themselves, and how they learn or don't learn in the future.

Undermines Growth Mindset Promotes Growth Mindset
"You're a natural! I love that." "You're a learner! I love that.
"Well, at least you tried!" "That didn't work. Let's talk about how you approached it and what might work better."
"Great Job! You're so talented!" "Great job! What's one thing that could have been even better?"
"This is hard. Don't feel bad if you can't do it." "This is hard. Don't feel bad if you can't do it yet."
"Maybe this just isn't your strength. Don't worry-you have other things to contribute." "I have high standards. I'm holding you to them because I know we can reach them together."

A similar shift in messaging might work for teams:

Undermines Growth Mindset Promotes Growth Mindset
"We don't have the skills to do that" "We can do that if we first learn these skills."
"We're going as fast as we can." "What's one thing we could change to help us go faster?"
"Our launch went perfectly!" "Great launch! How can we do even better next time?"
"So and so isn't a good fit for this type of project." "So and so doesn't have the right skills for this yet, but we can teach so and so by..."
"This isn't our strength." "We need to hold ourselves to a higher standard with this because it isn't yet our strength."

Today's solutions to safer streets

It's great that self-driving cars will eventually reduce fatalities, but even today there are things that cities can do to make streets safer.

Research has demonstrated that making a street feel more dangerous causes drivers to increase their awareness which leads to fewer accidents. This is really interesting, and counterintuitive.

Cities can also make pedestrians and bikers more visible, for example with curb extensions (a.k.a. bulb-outs), trees, and parking protected bike lanes.

Personally, I'd be down with wider sidewalks and narrow streets across the board, but that might have to wait until parking is less needed.

Self-driving cars and traffic

One useful way to think about self-driving cars is to imagine them as more perfect than human drivers, eliminating many of the inefficiencies that reduce the throughput of roads. For example, making intersections more efficient or reducing the compounding negative effects of traffic jams

It's nice to imagine that these efficiency gains will lead to less traffic. Unfortunately, it's also wrong. To understand why, consider a well-studied change has also increased capacity of roads over the past 50 years: the addition of more lanes and new highways. And the conclusion is that more capacity induces more demand such that overall traffic is not reduced.

From this research we should expect self-driving cars to increase total miles traveled by cars but without any noticeable reduction in traffic. 

If only that were the end of the story. Alas, self-driving cars not only increase the efficiency of the road, but also make the ride more comfortable for the driver who no longer has to drive.

A quick thought exercise: How much longer are you willing to commute if you could spend that time reading, watching netflix, or with your kids rather than focused on the road? In my own experience, I'm willing to almost double my commute.

This willingness to spend more time will translate directly into more induced demand and longer trips. Get ready for more gridlock.

How private should home be?

My housemates, perhaps obviously, have keys to my home. Clearly I trust them not to walk off with my laptop while I'm out. So why don't my best friends also have keys?

Even though it's unusual, it makes a lot of sense. With a key to my place, a friend can

  • wait inside when they arrive before I do
  • leave their bike at my place when they are headed to an event nearby
  • stop in to use the bathroom and see if anyone's around
  • use my living room as an "office" when I'm not around during the day

In the past this has been a bit of a hassle because keys need to be duplicated, and it's very hard to revoke access. But with an internet-connected lock, this becomes far easier, not to mention trivial to log every access.

The less well known story of containerization

Containerization changed the world of shipping. But another insight happened at the same time: the realization that trucks, trains, and ships are all in the same business, the transportation of goods.

This might seem obvious now, but it wasn't then. At the time, it was unthinkable to imagine building or buying an end to end string of trucks, railcars, ports, and ships that make it possible to guarantee a shipment's arrival date in the hands of consumers on another content. 

Modular construction? Not quite there yet.

Shipping containers helped reduce shipping costs by 50 to 90% by eliminating most of the work that was required to load and unload cargo from ships, trains, and trucks. But even after this technology was first proven to be effective, it took over a decade before it was clearly on the way to dominating the industry.

A similar concept is at work with modular construction, where walls and even entire structures are produced in a factory and are then placed on the construction site. The messy and time consuming alternative is to build and assemble everything locally, which is labor-intensive and harder to speed up. For now, modular construction hasn't yet made a dent in building costs or times, but perhaps we are in a similar decade of uncertainty. 

Cities support smallness, suburbs support bigness

A city is by definition big (in terms of density) compared to the surrounding area. And yet, paradoxically, cities are better at supporting smallness than suburban and rural areas. 

A small employer in the city doesn't need to offer a parking lot, because the city has ample transportation. It doesn't need to offer onsite meals, haircuts, or help with taxes. It can focus.

Further away from the city the big one stop shopping experience is king. First came malls, and then walmart. 

This notion of big enabling small can also be seen with aggregators like Google & Facebook which enable individual niche publishers in a way that newspapers never did. But, unlike a city, the leaders at Google & Facebook aren't voted in by the people. 


The method of transportation influences coincidental interaction.

When an afterschool program ends I often see parents wait in their cars to pick up their kids. With cars lined up one after each other parents don't get the opportunity to see and chat with other parents they know. This problem simply wouldn't exist if everyone was on foot.

Imagine how much more connected a school or afterschool program might be with parents that have a chance to chat every day or every week rather than hardly at all.

Residential Bicycle Parking

Here in San Francisco it's common to see shops with bike parking, but rare to see bike parking on residential streets. 

Recently a home on my block renovated their garage and in the process added bike parking. I love it. What better way to tell guests and the public that bikes are welcome than to explicitly make space for them.