I just watched the Charlie Rose interview with Liv Ulmann and Kate Blanchett about the new production of “A Streetcar Named Desire”, playing at BAM in New York. Liv Ullman, a terrific actress herself, is the director of this play, and she said something that strangely applied to the rest of my days conversations. She spoke about that moment when observing an actor that you are directing, when the actor gets it exactly right. The moment is so moving that words cannot describe why it is so perfect. The director is left with a dilemma. Should she tell the actor that he or she got it right, and try to figure out why, or just leave it and be happy it is there? There is risk in both of these approaches. Speaking of it may intellectualize a purely instinctual and brilliant act of the subconscious mind. On the other hand, not speaking of it may mean that it was simply one moment, which may never again be repeated. I know what she is talking about, both from my days in theatre and now working in science. There is a sense of the complexity of inspiration that is humbly rooted in our knowledge of all we don’t know. Human psychology and character development are so deeply intertwined with life experience, theatrical experience, and character interpretation. There is this same thing that happens with invention, and can be equally as fragile.
There are different strongly held beliefs in how to handle intellectual property. Invention of a new technology is not entirely different from the process of bringing a character to life. Like the play, the invention is a unification of previous ideas. Views on how to handle these ideas have varied, and distinguished inventors have disagreed on whether the patent system is truly the best place for them to be revealed. There is an idea, that until the open source movement in software, seemed quant. Benjamin Franklin said after inventing the open stove; “as we enjoy great advantages from the inventions of others, we should be glad of an opportunity to serve others by any invention of ours; and this we should do freely and generously.” This is a highly romantic ideal that has not been very practical. Even not for profit Universities and hospitals now routinely seek patents in order to finance further research. Patents actually do half of what Franklin was suggesting. They do allow others to make and understand the exact invention. They just can’t do it freely for 20 years. By the way, Thomas Jefferson agreed with Franklin on this account. Luckily for them they made their money in other ways, not relying on science and technology for an income. Most private inventors and corporations don’t have this benefit. There is another way that inventions are handled in modern society, which is through trade secrets. The concept of trade secrets is best known in the food and beverage industry. The secret formulas to Coca Cola or to KFC have been famously guarded. This is true though in nearly every product and process, even ones who have extremely strong patents. The truth about trade secrets may be much less brilliant, but more mysterious than a patent. I feel that in most cases a trade secret is something in a process that makes a product unique, even if the company or inventor doesn’t know what it is. I think that it is very possible that Coca Cola does have a secret recipe, but that the recipe by now must have made its way to competitors. The only explanation then on how Coke is still different is that something in the way they make it is different, so they keep making it the same way. This is not so much invention, but chance.
Nature works in similar ways to the trade secret method. There is no patent on trees or minerals. They have come into their present form through a process that worked to keep them intact. Recently while working here in Paris with a very renowned polymer chemist, we were discussing a strange natural phenomenon. For 75 years chemists have been able to create a synthetic rubber which has the exact same chemical structure as natural rubber that comes from the Hevea tree. This was a major development, but strangely when we look at the properties of the natural rubber and the equivalent synthetic, the results are different. With all of our technical and analytical knowledge, we don’t know why this is. For this reason Natural Rubber is still used for many applications. When I was discussing this with my father, he suggested that this was somehow natures “trade secret”. He is right. There is something that for the last billion or so years has been refined to create the latex that is so unique. Nature is not an intelligent being, so likely it does not know why. It just happened, and continues to happen the same way over and over. The same thing is true of silicon, which has a near perfect structure. We would love to create something this perfect in a lab, but we haven’t had the billions of years of trial and error yet. I think with the prototype to evaluate, we should be able to do it faster.
This brings me back to the actors, to instinct and to chance innovation. Perhaps most of what we do is about freezing a process on stage, in a factory or in a lab at the exact right moment. It is also possible that this ability to know when and how to do this is what makes great directors, inventors and companies.
Wednesday, December 30, 2009
Wednesday, December 16, 2009
Experimenting
Just because something doesn't do what you planned it to do doesn't mean it's useless.
Thomas A. Edison
If you are an experimental scientist, your days are likely to be either incredibly frustrating, or incredibly exhilarating. Actually for many of us this oscillation of emotions is the natural bipolar state of the work that we are driven to do. Everyone has a slightly unique process for experimentation. I tend to start with improvisation, while other, more organized scientists begin by systematic preparation. An improvisation is by its nature different than an experiment. It is more like psychoanalysis, with free association of ideas, without any conscious direction. I remember this being called brain storming in business and school meetings. For me an improvisation can clear my mind, so that I can see what is already in front of me, rather than be trapped by outside thoughts. As I said though, this is not really an experiment. An experiment requires more than improvisation, it requires an idea, or hypothesis, so that a proper test, and set of testing conditions can be designed. In cases like the Large Hadron Collider at the CERN labs in Switzerland, 15 years have been spent preparing for experiments. One of the key experiments at LHC has been sculpted by the world’s leading physicists over much of this time. The Hypothesis is that a unique particle, called the Higgs Boson, can be detected by colliding protons at high energies near the speed of light. Most physicists expect this particle, called by many the “god particle”, to be detected, confirming one of the 20th century’s most famous, yet improvable theories in particle physics. This is what is generally thought of as experimentation. At the 2009 Origins Conference in Arizona, two physicists Laurence Krauss and Brian Greene talked of an even more rewarding, or exciting possibility. Dr. Green said “what would be even better than finding the Higgs at the LHC, is not finding it. It would show all of us that there is something else to be discovered. Of course this wouldn’t be good for financing another large experiment like this.”
Greene was on to something that is generally misunderstood about scientists. Even when an experiment is well planned, and a hypothesis well formulated, we are even more enthralled by the possibility that the experiment leads us to entirely new places. The reason for this is that we trust that nature is inherently more interesting than we can first imagine.
Small technology companies are no less of an experiment than one run in a lab. Like the scientist in the lab, the entrepreneur is putting all of his mental capabilities into a hypothesis, believing that his idea is of value. The good entrepreneur, like the good scientist, is even more moved by the idea which he didn’t have. In other words when the experiment of trying an idea fails, he assumes that it must mean that there is an even better solution. This can make for difficult days, quarters and years, but ultimately the openness to reinterpret the experiment can lead to more beautiful places than the original design.
One area of the start-up which is often misrepresented, or at least not thought of in this light, is staffing. When I was a theatre director I was given a common piece of advice which is that “90% of the director’s job is casting.” This is true of course for directing and hiring engineers, but it is not as rigid as might be implied. When the director Mike Nichols hired Dustin Hoffman for “The Graduate” his choice was mocked throughout Hollywood. Hoffman was too old, to small and too Jewish. The role of Benjamin Bradick should have been given to Robert Redford, by all of the loose metrics of casting wisdom. Nichols was participating in an expensive Hollywood experiment, and one that ultimately paid off with one of the most successful films of its era. In hindsight Nichols is seen as a genius for this decision. When asked about it though, he doesn’t see it this way. He claims that the reason for choosing Hoffman was not based on an imagined box office success, but rather just because he thought Hoffman was good. He chose to experiment on Hoffman, not knowing for certain how he would fit in the role, but believing him to be a good enough actor that somehow he would.
“The Graduate” casting example is exactly what plays itself out when hiring the first few engineers in a company, and probably everyone after that. Sometimes it is not always best to hire the MIT Ph.D. with a specialty in your field. Sometimes that is like casting Robert Redford in “The Graduate”. It would work probably, but it might not be as inventive as you would like. There was also one other small advantage to the casting of Dustin Hoffman, which at first may seem like a compromise. Hoffman was an unknown, and was not as expensive as Redford. I don’t think this was Nichols reason for casting him, but in the end it didn’t hurt either. Because the production was under budget in casting, they were able to reallocate some of that money towards the scenery, which included the famous modern and post modern monochrome homes of the Bradicks and the Robinsons. It also didn’t hurt Hoffman, as he is now one of Hollywood’s top paid actors.
The early years of Tech Pro were much leaner than “The Graduate” pre-production days, but there were some similarities. My parents were looking at doing something that shouldn’t have been able to be done with a small amount of investment capital. They were trying to open a software, and hardware company to create completely new technologies, in order to compete with Monsanto, which was at the time a Fortune 50 company. Although it is obvious that this experiment was a risky one, and that there would be challenges, the challenge of hiring seemed easily approached by following common business wisdom: if a company has only a few dollars, at least those dollars should go to the obviously most qualified person. But, what if there aren’t even enough dollars to work with, or if it means changing your financing model in order to raise additional funds?
The story of Jeff
The summer of 1985 was a period of transition for Tech Pro. The company itself was experimenting through improvisation and hypothesis, starting as a garage refurbishing shop. That is really all it was. My Father had worked in Akron, the rubber capital of the world (at least then), in many areas of the industry, from manufacturing rubber, to working in a testing lab, to working for Monsanto, who made testing instrumentation. During this time period Monsanto had a near monopoly on a type of instrumentation called rheometers, which were the only practical way of evaluating vulcanization of rubber. In the mid 1980’s there was a transformation in the industry occurring. The large tire companies were being acquired by foreign firms, and local factories were being closed. At the same time smaller US companies were filling some of the gap left by the departure of the major players. These smaller companies couldn’t afford the rheometers that were by natural supply and demand standards expensive from Monsanto. My parents made a logical bridge between the factory closures, and the need for low cost instrumentation. They purchased used instruments from shuttered plants at auctions, and rebuilt them to resell to the new companies needing cheaper instruments. This was, not surprisingly, welcome news to the industry. It was also a lot of work. Tech Pro hired first a night maintenance man from Kmart to help with the rebuilding. Joe Bulman was a superb tinkerer, and even though hired mainly as a technician, showed creative interests, and abilities. So, he became a design partner, and was the first person to design, along with my father, an original rheometer, not just a refurbished old one. Actually, I will digress for a moment on this story, as it is a perfect example of an experiment that needed adjusting.
In 1985 Tech Pro was actually happy, and even profitable in its business of refurbishing and reselling rheometers. With Joe building, my mother doing the administration, and my father doing sales and installations, it was a nice, very small business. The way the process worked was that Tech Pro would find the old, usually not functional instruments, at an abandoned factory and cheaply acquire them. They would then strip the instruments to only there bare physical structure. They would buy all new parts, from Monsanto, rebuild the instruments, paint them, test them and resell them. This was the entire business at the time. Then a shock that could have stopped Tech Pro at this stage happened. Monsanto refused to sell Tech Pro any more parts. Since Monsanto was the only supplier, there were no other choices. That is except the one that now seems obvious. Tech Pro started to make its own instruments. At this point my father moved from being a salesman, and installation man, to a designer, and Joe became an engineer.
Once Tech Pro had an equivalent, but less expensive instrument to Monsanto, the idea of being just a second supplier lost its excitement. My father was an experimenter at heart, and wanted to experiment with the most exciting technology of the day, the personal computer. Personal computers in 1985 had started to find their way into corporations in many ways. The large main frames of the past were no longer necessary for many applications. Spreadsheets and word processing were being used by nearly everyone. Accounting departments and human resources were starting to use personal computers. In the rubber laboratory, however, analogue devices, called recorders, were the only way to acquire information from rheometers. Personal computers seemed like a perfect fit. A computer would be able to acquire data from the instrument, and store the information. It should also be able to do mathematical calculations to help with the interpretation of that data. The problems in pursuing this line of experimentation were: 1). Joe, my mother and my father had never programmed before, and 2). Computer scientists were scarce and expensive.
Though Joe was the only engineer at Tech Pro in 1985, the work load for building and rebuilding instruments had increased to the point where some hourly employees were necessary to help with the manual labor involved. When a company is as small as Tech Pro, every hire is important, and risky, no matter how unskilled, or low paid the job appears to be. My parents even had a test, which was not so much based on knowledge but instead based on problem solving and creative manipulation. An example from this was putting together a pizza box quickly. Another involved an aspect of design. The only knowledge based questions were ones of electronics. It was important that every early Tech Pro employee know some basics, as everyone needed to multitask. There was also a search for a computer geek. For people who spent time building their own computers, and coding video games. Tech Pro was looking for people who had fun with computers and electronics, not people who were educated in them.
One of these early shop hands was Jeff Archer. Jeff was in his early twenties, high school educated, and clumsy with tools. In such a small firm, where the ability to use a broom, and a drill were more important than your ability to do differential equations, this could have been a problem. Instead months went by with Jeff working hard, but not extremely effectively as an assistant of sorts to Joe. Jeff’s potential during this time was growing, as he was indeed leaving work to build his own computers, and doing programming. When my father decided that he wanted to create the first PC applications for rheometers, he did not search for capital, and computer scientists, he instead looked for the geek with the broom. Jeff, and my father worked together to make the first ever PC driven rheometer system. Jeff was not just good technically, he was creative, and smart, and understood, like my father did, the psychology of the user. Together they created a system which was such a smooth transition from analogue to digital, that within 5 years the entire industry had embraced it.
Jeff was an experiment that paid off for him, for Tech Pro, and for the rubber industry in ways that were never hypothesized when he was hired. Still the flexibility and insight to see in him as a potential partner made something unique possible. Only in a small company where the owner knows the worker can this discovery be made.
Thomas A. Edison
If you are an experimental scientist, your days are likely to be either incredibly frustrating, or incredibly exhilarating. Actually for many of us this oscillation of emotions is the natural bipolar state of the work that we are driven to do. Everyone has a slightly unique process for experimentation. I tend to start with improvisation, while other, more organized scientists begin by systematic preparation. An improvisation is by its nature different than an experiment. It is more like psychoanalysis, with free association of ideas, without any conscious direction. I remember this being called brain storming in business and school meetings. For me an improvisation can clear my mind, so that I can see what is already in front of me, rather than be trapped by outside thoughts. As I said though, this is not really an experiment. An experiment requires more than improvisation, it requires an idea, or hypothesis, so that a proper test, and set of testing conditions can be designed. In cases like the Large Hadron Collider at the CERN labs in Switzerland, 15 years have been spent preparing for experiments. One of the key experiments at LHC has been sculpted by the world’s leading physicists over much of this time. The Hypothesis is that a unique particle, called the Higgs Boson, can be detected by colliding protons at high energies near the speed of light. Most physicists expect this particle, called by many the “god particle”, to be detected, confirming one of the 20th century’s most famous, yet improvable theories in particle physics. This is what is generally thought of as experimentation. At the 2009 Origins Conference in Arizona, two physicists Laurence Krauss and Brian Greene talked of an even more rewarding, or exciting possibility. Dr. Green said “what would be even better than finding the Higgs at the LHC, is not finding it. It would show all of us that there is something else to be discovered. Of course this wouldn’t be good for financing another large experiment like this.”
Greene was on to something that is generally misunderstood about scientists. Even when an experiment is well planned, and a hypothesis well formulated, we are even more enthralled by the possibility that the experiment leads us to entirely new places. The reason for this is that we trust that nature is inherently more interesting than we can first imagine.
Small technology companies are no less of an experiment than one run in a lab. Like the scientist in the lab, the entrepreneur is putting all of his mental capabilities into a hypothesis, believing that his idea is of value. The good entrepreneur, like the good scientist, is even more moved by the idea which he didn’t have. In other words when the experiment of trying an idea fails, he assumes that it must mean that there is an even better solution. This can make for difficult days, quarters and years, but ultimately the openness to reinterpret the experiment can lead to more beautiful places than the original design.
One area of the start-up which is often misrepresented, or at least not thought of in this light, is staffing. When I was a theatre director I was given a common piece of advice which is that “90% of the director’s job is casting.” This is true of course for directing and hiring engineers, but it is not as rigid as might be implied. When the director Mike Nichols hired Dustin Hoffman for “The Graduate” his choice was mocked throughout Hollywood. Hoffman was too old, to small and too Jewish. The role of Benjamin Bradick should have been given to Robert Redford, by all of the loose metrics of casting wisdom. Nichols was participating in an expensive Hollywood experiment, and one that ultimately paid off with one of the most successful films of its era. In hindsight Nichols is seen as a genius for this decision. When asked about it though, he doesn’t see it this way. He claims that the reason for choosing Hoffman was not based on an imagined box office success, but rather just because he thought Hoffman was good. He chose to experiment on Hoffman, not knowing for certain how he would fit in the role, but believing him to be a good enough actor that somehow he would.
“The Graduate” casting example is exactly what plays itself out when hiring the first few engineers in a company, and probably everyone after that. Sometimes it is not always best to hire the MIT Ph.D. with a specialty in your field. Sometimes that is like casting Robert Redford in “The Graduate”. It would work probably, but it might not be as inventive as you would like. There was also one other small advantage to the casting of Dustin Hoffman, which at first may seem like a compromise. Hoffman was an unknown, and was not as expensive as Redford. I don’t think this was Nichols reason for casting him, but in the end it didn’t hurt either. Because the production was under budget in casting, they were able to reallocate some of that money towards the scenery, which included the famous modern and post modern monochrome homes of the Bradicks and the Robinsons. It also didn’t hurt Hoffman, as he is now one of Hollywood’s top paid actors.
The early years of Tech Pro were much leaner than “The Graduate” pre-production days, but there were some similarities. My parents were looking at doing something that shouldn’t have been able to be done with a small amount of investment capital. They were trying to open a software, and hardware company to create completely new technologies, in order to compete with Monsanto, which was at the time a Fortune 50 company. Although it is obvious that this experiment was a risky one, and that there would be challenges, the challenge of hiring seemed easily approached by following common business wisdom: if a company has only a few dollars, at least those dollars should go to the obviously most qualified person. But, what if there aren’t even enough dollars to work with, or if it means changing your financing model in order to raise additional funds?
The story of Jeff
The summer of 1985 was a period of transition for Tech Pro. The company itself was experimenting through improvisation and hypothesis, starting as a garage refurbishing shop. That is really all it was. My Father had worked in Akron, the rubber capital of the world (at least then), in many areas of the industry, from manufacturing rubber, to working in a testing lab, to working for Monsanto, who made testing instrumentation. During this time period Monsanto had a near monopoly on a type of instrumentation called rheometers, which were the only practical way of evaluating vulcanization of rubber. In the mid 1980’s there was a transformation in the industry occurring. The large tire companies were being acquired by foreign firms, and local factories were being closed. At the same time smaller US companies were filling some of the gap left by the departure of the major players. These smaller companies couldn’t afford the rheometers that were by natural supply and demand standards expensive from Monsanto. My parents made a logical bridge between the factory closures, and the need for low cost instrumentation. They purchased used instruments from shuttered plants at auctions, and rebuilt them to resell to the new companies needing cheaper instruments. This was, not surprisingly, welcome news to the industry. It was also a lot of work. Tech Pro hired first a night maintenance man from Kmart to help with the rebuilding. Joe Bulman was a superb tinkerer, and even though hired mainly as a technician, showed creative interests, and abilities. So, he became a design partner, and was the first person to design, along with my father, an original rheometer, not just a refurbished old one. Actually, I will digress for a moment on this story, as it is a perfect example of an experiment that needed adjusting.
In 1985 Tech Pro was actually happy, and even profitable in its business of refurbishing and reselling rheometers. With Joe building, my mother doing the administration, and my father doing sales and installations, it was a nice, very small business. The way the process worked was that Tech Pro would find the old, usually not functional instruments, at an abandoned factory and cheaply acquire them. They would then strip the instruments to only there bare physical structure. They would buy all new parts, from Monsanto, rebuild the instruments, paint them, test them and resell them. This was the entire business at the time. Then a shock that could have stopped Tech Pro at this stage happened. Monsanto refused to sell Tech Pro any more parts. Since Monsanto was the only supplier, there were no other choices. That is except the one that now seems obvious. Tech Pro started to make its own instruments. At this point my father moved from being a salesman, and installation man, to a designer, and Joe became an engineer.
Once Tech Pro had an equivalent, but less expensive instrument to Monsanto, the idea of being just a second supplier lost its excitement. My father was an experimenter at heart, and wanted to experiment with the most exciting technology of the day, the personal computer. Personal computers in 1985 had started to find their way into corporations in many ways. The large main frames of the past were no longer necessary for many applications. Spreadsheets and word processing were being used by nearly everyone. Accounting departments and human resources were starting to use personal computers. In the rubber laboratory, however, analogue devices, called recorders, were the only way to acquire information from rheometers. Personal computers seemed like a perfect fit. A computer would be able to acquire data from the instrument, and store the information. It should also be able to do mathematical calculations to help with the interpretation of that data. The problems in pursuing this line of experimentation were: 1). Joe, my mother and my father had never programmed before, and 2). Computer scientists were scarce and expensive.
Though Joe was the only engineer at Tech Pro in 1985, the work load for building and rebuilding instruments had increased to the point where some hourly employees were necessary to help with the manual labor involved. When a company is as small as Tech Pro, every hire is important, and risky, no matter how unskilled, or low paid the job appears to be. My parents even had a test, which was not so much based on knowledge but instead based on problem solving and creative manipulation. An example from this was putting together a pizza box quickly. Another involved an aspect of design. The only knowledge based questions were ones of electronics. It was important that every early Tech Pro employee know some basics, as everyone needed to multitask. There was also a search for a computer geek. For people who spent time building their own computers, and coding video games. Tech Pro was looking for people who had fun with computers and electronics, not people who were educated in them.
One of these early shop hands was Jeff Archer. Jeff was in his early twenties, high school educated, and clumsy with tools. In such a small firm, where the ability to use a broom, and a drill were more important than your ability to do differential equations, this could have been a problem. Instead months went by with Jeff working hard, but not extremely effectively as an assistant of sorts to Joe. Jeff’s potential during this time was growing, as he was indeed leaving work to build his own computers, and doing programming. When my father decided that he wanted to create the first PC applications for rheometers, he did not search for capital, and computer scientists, he instead looked for the geek with the broom. Jeff, and my father worked together to make the first ever PC driven rheometer system. Jeff was not just good technically, he was creative, and smart, and understood, like my father did, the psychology of the user. Together they created a system which was such a smooth transition from analogue to digital, that within 5 years the entire industry had embraced it.
Jeff was an experiment that paid off for him, for Tech Pro, and for the rubber industry in ways that were never hypothesized when he was hired. Still the flexibility and insight to see in him as a potential partner made something unique possible. Only in a small company where the owner knows the worker can this discovery be made.
Monday, December 7, 2009
Simplicity
Simplicity
Truth is ever to be found in simplicity, and not in the multiplicity and confusion of things.
— Sir Isaac Newton
Science fiction is a real passion for many scientists and non-scientists. Perhaps it may even account for the reason many of us work in science at all. For my generation, and my parents’ generation, there are two television series that most represent an idealized technological universe, Star Trek and Doctor Who. These two are markedly different from Orwellian type futurist fiction, in that they are not meant as a warning against technological advancement, but rather an excitement for its arrival. Something which strikes me as amazing is that the most popular character in Star Trek is Spock, the logical, knowledgeable Vulcan, who, until the recent Star Trek film, avoids human emotion in favor of reason. The Doctor, in Doctor Who, is certainly emotional, but he avoids commitment in a way, favoring discovery for its own sake. The Doctor sees nothing more romantic than traveling to the edges of time and the known universe, where even his vast comprehension is challenged, forcing him to learn something new. The reason that Spock and The Doctor are so enticing for the scientist, and the fan, is that they are able to reduce the complexity of the universe into something that is comprehensible for them, so, therefore, we feel it is possible for us. They remind us that while it takes a long time to learn things (The Doctor is over 900 years old!), once we know them those things become simple. The goal for them and for us is to have as much simplicity as possible in our lives. If we succeed, Quantum Chromadynamics and partial differential equations become second nature.
Business tends to have the inverse value system. Specialization is not the same in business ideology. A CEO is not meant to understand the mechanics of financial models that make up the foundation of his company, or to understand the cultural components that affect the work habits and productivity of his thousands of employees. The job of a CEO is to create layers of complexity in the system, all of which he feels are handled by others, so that he can focus on the most illogical part of the process, which is vision. A business leader relies on the two things that Spock or The Doctor would never accept; faith and emotion. The faith is accepting that the system in place works, and that the thousands of employees he doesn’t even know are doing something useful. The perception, even by the leader himself, is that this is not happening.
Now more than ever a CEO is bombarded with data. This data is too much for any one person to fully grasp; yet major decisions need to be made from it. In Malcolm Gladwells essay on the Enron crisis, he speaks of the complications of the accounting, and structural components of the Enron crisis. He suggests that there was so much data form special entity companies that Enron created, that it was actually not possible for the CEO Jeff Skilling to truly understand what was going on. So while claiming to be using numbers, those numbers were useless in really evaluating the situation. The company was just too large and too complex. Like Skilling, many CEOs then revert to an instinctual and rigid evaluation of a company’s health. My mother refers to this as “management by spreadsheet”, which until recently I didn’t completely understand, or even agree with. A spreadsheet appears to be very scientific. Then I revisited the lab environment. During a course of any experiment, enormous amounts of data are generated, and put into spreadsheets. Nearly anyone can do this. The creative scientist is not the one to compile data, but to properly analyze it. It is possible that a trained CEO could analyze data well. It is not likely though that he can analyze well the complete data that is presented to him. A scientist is always trying to narrow the scope of a single evaluation, because looking at multiple things at one time introduces too many variables to properly understand. A CEO, even if somehow very mathematical and analytical by nature, couldn’t possibly do this. He is instead forced to rely on generalizations about the data. This leads to an impersonal management style, and ultimately on that is not quantitative at all.
Being emotional, and trusting are not bad qualities. It is what makes us different from a Vulcan or Time Lord. It is risky though to be in a situation where you are incapable of returning to the hard facts when necessary. This is a major advantage for small technology companies, who have less than 100 employees. In these companies you can read the financial statements monthly, talk with all of the engineers daily, and analyze customer satisfaction on your own.
The hallmark of an overly complex business community can be seen at corporate headquarters, when business managers spend 90% of their days in meetings. I have been a consultant for large companies, and have found myself in some of these meetings. The goal is a good one; to make grand plans for the business. These meetings usually end up producing documents of notes from the meetings, and the notes produce documents of a strategy, which if you wait long enough trigger another meeting, which in the rare instance result in a document that gets passed down the management chain. Occasionally this may lead to innovation, but it is by nature an isolating process, where the meeting room and the document generation process become a bigger part of the route than the product or customer. This actually tends to happen even at small companies, especially those managed by MBAs. It rarely happens at small companies run by engineers or scientists, because engineers are too curious to not be involved. The Doctor would never delegate a mission to the future in a distant galaxy, because the joy of being a Time Lord is visiting it yourself, or with partners. This is one place where Google, even as large as it has become, succeeds. The founders and all major executives are engineers themselves, and avid users of the product. They understand creativity and how it comes from experimentation, rather than meetings. So each Google engineer is required to spend 20% of their time working on any idea they have. The other 80% is spent on other Google projects. That is 100%, none of which is in meetings. CEO Eric Schmitt, in a 2006 Charlie Rose interview, admits that this is getting more and more difficult as they grow. He claims that founder Larry Page knew the first 2500 employees personally, and exactly what each made. Page is brilliant of course to be able to remember 2500. For most of us knowing 100 people is about maximum. So now that Google has 30,000, even Page is in the dark about most of his employees.
My father ran Tech Pro with Google style ideals. Since Tech Pro was so small it wasn’t necessary to formally structure them. There were small clues that let employees and customers know that it was a business run by curiosity and the thrill of science, rather than by meeting. One was that no one had titles on their business cards. While this may have been a deliberate choice, it was more of a practical one. Technician, salesman, engineer or president were each expected to be an advocate for the customer.. There was a constant feedback loop between customers and product development, without the middle or top bureaucracy which slows down progress. Another system which was at place at Tech Pro was a loose work schedule for engineers and especially programmers. These jobs were as creative as they were scientific, and people work better at different times of day or night. Often a programmer would still be at Tech Pro at midnight, even though he might not arrive the next day until noon. This made everyone feel a certain ownership in the products they were creating, but also a feeling of ownership in the company itself. The workplace often became an extension of their home where they not only worked but made coffee and ordered pizza. This sometimes meant that during the actual work day some engineers did very little work. They talked, had lunch and walked around the outside of the building smoking. With this strange schedule there was no time for, or really any need for long formal meetings, because small informal ones were happening all of the time.
It is obvious to me that this bureaucracy -free system is simpler to maintain, and for small companies more effective and fun. It also has a way of transferring to the products and services as well. Customers become a natural extension of this environment, as the Tech Pro team is used to seeing the business “universe” as approachable rather than intimidating. Product design also tends to reduce complexity into simpler components. Tech Pro always used off the shelf components because they were available quickly and any time of day or night. For development this meant that you didn’t need to wait for an outside consultant to prepare a proprietary scheme. This made the costs of the final product less, and also led to innovation that could not have happened otherwise.
By working simply, Tech Pro was actually more efficient and more interesting Simplicity was the rational approach to organization that Spock would have wanted and the adventurous approach that The Doctor would have embarked on. Technology and business can seem very complex but when seen in retrospect everything that has been done is very simple.
Tuesday, December 1, 2009
Risk
For a dying man it is not a difficult decision [to agree to become the world's first heart transplant] ... because he knows he is at the end. If a lion chases you to the bank of a river filled with crocodiles, you will leap into the water convinced you have a chance to swim to the other side. But you would not accept such odds if there were no lion.
— Christiaan Barnard
Scientists suffer from an unfair reputation in America. They are considered to lack instinctual savvy. For this reason, nearly every physicist I know is deeply offended by the stereotypical characters in the CBS sitcom “The Big Bang Theory.” They are socially awkward and tend to quantify even the most banal details of life. What my colleagues miss about “The Big Bang Theory” though, is that hidden underneath all of the silliness these characters possess something that is unique, and apparently rather attractive about scientists. After all, even the Asbergian self-centered Sheldon is likeable , I actually think that there is something about the geekiness of “The Big Bang Theory” that is every bit as attractive as the coolness of the “Sex in The City” ladies. Though this is certainly a project for sociologists and not me, I have a hypothesis regarding television likeability and culture. I think that somehow we know that the common perception of cool is not really all that important, or even interesting. This is a significant, even if unconscious, realization for modern television viewers, because common wisdom takes a long time to become common. It is also interesting because it gives a defense for seeing the Universe and ourselves differently. In essence we think that everything Sheldon does is not intuitive. He is a classic clown in this way. He humiliates himself by creating friendship surveys so that he can create a mathematical model to see who would best qualify as a friend. Our instincts are the opposite of this. We become friends with people because they are attractive in some, sometimes superficial, way. They make us laugh, or they are handsome, or they are somehow dynamic in a way that we wish we were. For anyone who has had friends they ended up hating, or has been married and divorced, human instincts are exceptionally bad.
This is one area where a geeky physicist may have some insight on business that is different than everyone else. Physicists are used to the facts being different than the way they feel. The Copernican revolution is one of the first examples of this: it doesn’t feel right that the earth rotates around the sun. This is even truer of 20th century physics. Our instincts are absolutely insufficient to understand Einstein. General Relativity, with warped space-time, just isn’t in our normal arsenal of instinctual survival skills. Quantum mechanics is even less intuitive, so much so that one of its discoverers, the Danish Nobel Laureate Neils Bohr famously said, “If quantum mechanics hasn't profoundly shocked you, you haven't understood it yet.” So to be a good physicist or scientist in general, it is important to be at least a little “Sheldonesque.” We must not trust our instincts, but instead investigate the truth. In facts and friendships we need to consider quantitative data, not just attraction.
A field of science which is relatively new is called “evolutionary biology”. You would think that this would have started just after Darwin’s “Origin of the Species” was published in 1859, but it wasn’t. That revolutionary book was so well written, that it debunked all of recorded history’s various religious interpretations of biology without being all that difficult to understand. In fact, when you read “Origin of Species” the first thing that comes to mind is “why did it take so long to realize this?” Darwin just observed and recorded nature for many years, and made a leap which was incredibly obvious in retrospect; that there is a relation between species and that certain traits and species survive because of natural selection. This was, of course, controversial for all of the obvious reasons as well. Religion is both very personal and very political. Even though what Darwin was doing was science, it did step on some sacred beliefs. Still, to most people who read the book it made sense. Theodore Roosevelt read it when he was 14 years old and for the rest of his life claimed it was the most important book ever written. It is easy to see that Roosevelt’s love of nature shaped his decisions as president, and much of that can be traced back to his admiration for Darwin. So because of its apparently intuitive qualities, Natural Selection could be taught in biology classes, without there being a separate branch of the discipline devoted to it.
The surprising thing is that as much as Natural Selection made sense, it really wasn’t as intuitive as expected. What made most sense to humans about evolution was not the centuries it takes for species to transform themselves. This is hard to visualize. Instead it was an idea that humans could only prosper through a conscious survival of the fittest. The term Social Darwinism was coined in 1944 by the historian Richard Hofstedter to reference some rather disturbing contemporary human behavior that was carried out with the excuse of Darwinian naturalism. The most obvious during Hofsteder’s time was the eugenics programs of the Nazis. The concept of superior races, and linking human survival to the elimination of the unfit seemed like an extension of Darwin’s work. In fact, Darwin’s own cousin, Francis Galton, was the founder of Eugenics at the end of the 19th Century.
It is only when you let go of this instinctual idea of survival of the fittest that you can really see the true scope of Evolutionary Biology. Genetic mutations are slow to occur, and happen because of natural means, but humans have removed themselves from the natural process. Technology, as wonderful as it is, is only 10,000 years old. Until that time there was not agriculture or architecture. There were no cities or writings. We call everything before this “prehistory,” because until that point history was not created by deliberate societal choices. Darwinism has been in progress since the beginning of life on earth, but social Darwinism exists only during those times we call “history”. Therefore most scientists feel that we as humans are effecting nature, while behaving as if they were outside of the natural process. This is not instinctual, and is not as easy as “Origin of The Species” initially seemed to be.
Social Darwinism is also evident when evaluating risk. The 2008 credit crisis and banking collapse can be seen in this light. The majority of the crisis was caused by misunderstanding risk. Was it riskier to give certain loans or not? Was it riskier to make certain credit swaps or not? There are two prevalent points of view about why this happened, and in such dramatic and drastic ways. Most people not working in finance see it as a case of greed. This viewpoint is an unconscious blaming of social Darwinism. It holds that the wealthy Wall Street Bankers wanted to be the strongest, therefore richest, so they pushed for larger profits at the expense of the weaker greater population. On the other hand, the banking industry blames poor financial modeling for the collapse. The claim has been that the models did not appropriately explain the risks associated with these transactions. Even the most famous economist and Federal Reserve chief of all time, Allen Greenspan, used this explanation saying “the models of finance that I have followed were not accurate in predicting this crisis”. When we look at these two explanations we see a huge contrast, while both ignore something that is probably more accurate. It was neither greed nor modeling alone that caused this. It was merely a deficiency in our ability to instinctually comprehend risk. The numbers were too big, our vision of history too limited, and our confidence too great. It seems that we were not as smart as we thought. Growth seemed inevitable. We thought that credit and finance in general were part of the evolutionary process, but in fact they were removed from it. Derivatives and credit default swaps just happened too fast for Natural Selection to catch up with them.
This applies also to the personal and professional risks associated with starting a technology company. The common wisdom on the risks of entrepreneurship are strangely opposed to the way we approach risk in our daily lives. Most people change their risk threshold based on how much money they have. When we have very little money we tend to risk all we have, because we feel there is not much to lose. This is why lottery lines are longest in poor neighborhoods, and why casinos are filled with people who can’t really afford to lose the money that they are gambling with. These people feel that the upside is much larger than the downside. It just feels right, but is completely wrong. The odds of a poor person winning the lottery are just as bad as the odds of a rich person winning the lottery, but the risks associated with the poor person playing are so much worse. This wrong instinct extends through the middle classes and even to the wealthy, not for lottery tickets but for ideas and the money it takes to pursue them. Someone who is worth 2 Billion Dollars is less likely to risk 1 Billion dollars on a single venture or idea, than someone worth $ 200,000 is to risk $100,000 Even though the billionaire may lose much more money he certainly is in better shape financially than the person who loses half of his $200,000 investment. Our instincts are just that bad.
Instinctively entrepreneurs often work by the motto “never spend your own money”. I have been told this many times, by everyone from the founder of Cirque Du Soleil, to the investor of the leveraged buyout concept in the 1980’s. These people have been undoubtedly following their instincts, and those instincts have made them a lot of money. The question I need to ask myself is whether that would make me a lot of money too, and more importantly whether that would be the best thing for my company and the happiness. We have tended to answer no to that question. Seeking other people’s money presents a bigger risk for me than risking my own for reasons that seem completely unreasonable.
The main reason why technical entrepreneurs, like me and my family, may want to take relatively large risks compared to the Billionaire, but relatively small risks compared to the lottery addict is because it is a scale that we can relate to. There is an assumption that the risk taken is never so great that it will land us and our children on the street corner, but is none the less a risk that could alter our lifestyle. This is something a scientist can understand. A scientist knows he cannot appreciate in an instinctual way, those things which he cannot feel, and that further comprehension only comes through a deep knowledge of a subject. For a scientist starting a small company it isn’t always the most interesting use of his time to fully understand business, so he shouldn’t have to do it. The risk and reward factors change when this is considered. It becomes more risky to raise large sums of money because large sums of money may be out of the scientist/entrepreneur’s expertise. In order to gain that expertise he would have to sacrifice his true interests, which may very well be the riskiest choice of all.
— Christiaan Barnard
Scientists suffer from an unfair reputation in America. They are considered to lack instinctual savvy. For this reason, nearly every physicist I know is deeply offended by the stereotypical characters in the CBS sitcom “The Big Bang Theory.” They are socially awkward and tend to quantify even the most banal details of life. What my colleagues miss about “The Big Bang Theory” though, is that hidden underneath all of the silliness these characters possess something that is unique, and apparently rather attractive about scientists. After all, even the Asbergian self-centered Sheldon is likeable , I actually think that there is something about the geekiness of “The Big Bang Theory” that is every bit as attractive as the coolness of the “Sex in The City” ladies. Though this is certainly a project for sociologists and not me, I have a hypothesis regarding television likeability and culture. I think that somehow we know that the common perception of cool is not really all that important, or even interesting. This is a significant, even if unconscious, realization for modern television viewers, because common wisdom takes a long time to become common. It is also interesting because it gives a defense for seeing the Universe and ourselves differently. In essence we think that everything Sheldon does is not intuitive. He is a classic clown in this way. He humiliates himself by creating friendship surveys so that he can create a mathematical model to see who would best qualify as a friend. Our instincts are the opposite of this. We become friends with people because they are attractive in some, sometimes superficial, way. They make us laugh, or they are handsome, or they are somehow dynamic in a way that we wish we were. For anyone who has had friends they ended up hating, or has been married and divorced, human instincts are exceptionally bad.
This is one area where a geeky physicist may have some insight on business that is different than everyone else. Physicists are used to the facts being different than the way they feel. The Copernican revolution is one of the first examples of this: it doesn’t feel right that the earth rotates around the sun. This is even truer of 20th century physics. Our instincts are absolutely insufficient to understand Einstein. General Relativity, with warped space-time, just isn’t in our normal arsenal of instinctual survival skills. Quantum mechanics is even less intuitive, so much so that one of its discoverers, the Danish Nobel Laureate Neils Bohr famously said, “If quantum mechanics hasn't profoundly shocked you, you haven't understood it yet.” So to be a good physicist or scientist in general, it is important to be at least a little “Sheldonesque.” We must not trust our instincts, but instead investigate the truth. In facts and friendships we need to consider quantitative data, not just attraction.
A field of science which is relatively new is called “evolutionary biology”. You would think that this would have started just after Darwin’s “Origin of the Species” was published in 1859, but it wasn’t. That revolutionary book was so well written, that it debunked all of recorded history’s various religious interpretations of biology without being all that difficult to understand. In fact, when you read “Origin of Species” the first thing that comes to mind is “why did it take so long to realize this?” Darwin just observed and recorded nature for many years, and made a leap which was incredibly obvious in retrospect; that there is a relation between species and that certain traits and species survive because of natural selection. This was, of course, controversial for all of the obvious reasons as well. Religion is both very personal and very political. Even though what Darwin was doing was science, it did step on some sacred beliefs. Still, to most people who read the book it made sense. Theodore Roosevelt read it when he was 14 years old and for the rest of his life claimed it was the most important book ever written. It is easy to see that Roosevelt’s love of nature shaped his decisions as president, and much of that can be traced back to his admiration for Darwin. So because of its apparently intuitive qualities, Natural Selection could be taught in biology classes, without there being a separate branch of the discipline devoted to it.
The surprising thing is that as much as Natural Selection made sense, it really wasn’t as intuitive as expected. What made most sense to humans about evolution was not the centuries it takes for species to transform themselves. This is hard to visualize. Instead it was an idea that humans could only prosper through a conscious survival of the fittest. The term Social Darwinism was coined in 1944 by the historian Richard Hofstedter to reference some rather disturbing contemporary human behavior that was carried out with the excuse of Darwinian naturalism. The most obvious during Hofsteder’s time was the eugenics programs of the Nazis. The concept of superior races, and linking human survival to the elimination of the unfit seemed like an extension of Darwin’s work. In fact, Darwin’s own cousin, Francis Galton, was the founder of Eugenics at the end of the 19th Century.
It is only when you let go of this instinctual idea of survival of the fittest that you can really see the true scope of Evolutionary Biology. Genetic mutations are slow to occur, and happen because of natural means, but humans have removed themselves from the natural process. Technology, as wonderful as it is, is only 10,000 years old. Until that time there was not agriculture or architecture. There were no cities or writings. We call everything before this “prehistory,” because until that point history was not created by deliberate societal choices. Darwinism has been in progress since the beginning of life on earth, but social Darwinism exists only during those times we call “history”. Therefore most scientists feel that we as humans are effecting nature, while behaving as if they were outside of the natural process. This is not instinctual, and is not as easy as “Origin of The Species” initially seemed to be.
Social Darwinism is also evident when evaluating risk. The 2008 credit crisis and banking collapse can be seen in this light. The majority of the crisis was caused by misunderstanding risk. Was it riskier to give certain loans or not? Was it riskier to make certain credit swaps or not? There are two prevalent points of view about why this happened, and in such dramatic and drastic ways. Most people not working in finance see it as a case of greed. This viewpoint is an unconscious blaming of social Darwinism. It holds that the wealthy Wall Street Bankers wanted to be the strongest, therefore richest, so they pushed for larger profits at the expense of the weaker greater population. On the other hand, the banking industry blames poor financial modeling for the collapse. The claim has been that the models did not appropriately explain the risks associated with these transactions. Even the most famous economist and Federal Reserve chief of all time, Allen Greenspan, used this explanation saying “the models of finance that I have followed were not accurate in predicting this crisis”. When we look at these two explanations we see a huge contrast, while both ignore something that is probably more accurate. It was neither greed nor modeling alone that caused this. It was merely a deficiency in our ability to instinctually comprehend risk. The numbers were too big, our vision of history too limited, and our confidence too great. It seems that we were not as smart as we thought. Growth seemed inevitable. We thought that credit and finance in general were part of the evolutionary process, but in fact they were removed from it. Derivatives and credit default swaps just happened too fast for Natural Selection to catch up with them.
This applies also to the personal and professional risks associated with starting a technology company. The common wisdom on the risks of entrepreneurship are strangely opposed to the way we approach risk in our daily lives. Most people change their risk threshold based on how much money they have. When we have very little money we tend to risk all we have, because we feel there is not much to lose. This is why lottery lines are longest in poor neighborhoods, and why casinos are filled with people who can’t really afford to lose the money that they are gambling with. These people feel that the upside is much larger than the downside. It just feels right, but is completely wrong. The odds of a poor person winning the lottery are just as bad as the odds of a rich person winning the lottery, but the risks associated with the poor person playing are so much worse. This wrong instinct extends through the middle classes and even to the wealthy, not for lottery tickets but for ideas and the money it takes to pursue them. Someone who is worth 2 Billion Dollars is less likely to risk 1 Billion dollars on a single venture or idea, than someone worth $ 200,000 is to risk $100,000 Even though the billionaire may lose much more money he certainly is in better shape financially than the person who loses half of his $200,000 investment. Our instincts are just that bad.
Instinctively entrepreneurs often work by the motto “never spend your own money”. I have been told this many times, by everyone from the founder of Cirque Du Soleil, to the investor of the leveraged buyout concept in the 1980’s. These people have been undoubtedly following their instincts, and those instincts have made them a lot of money. The question I need to ask myself is whether that would make me a lot of money too, and more importantly whether that would be the best thing for my company and the happiness. We have tended to answer no to that question. Seeking other people’s money presents a bigger risk for me than risking my own for reasons that seem completely unreasonable.
The main reason why technical entrepreneurs, like me and my family, may want to take relatively large risks compared to the Billionaire, but relatively small risks compared to the lottery addict is because it is a scale that we can relate to. There is an assumption that the risk taken is never so great that it will land us and our children on the street corner, but is none the less a risk that could alter our lifestyle. This is something a scientist can understand. A scientist knows he cannot appreciate in an instinctual way, those things which he cannot feel, and that further comprehension only comes through a deep knowledge of a subject. For a scientist starting a small company it isn’t always the most interesting use of his time to fully understand business, so he shouldn’t have to do it. The risk and reward factors change when this is considered. It becomes more risky to raise large sums of money because large sums of money may be out of the scientist/entrepreneur’s expertise. In order to gain that expertise he would have to sacrifice his true interests, which may very well be the riskiest choice of all.
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