For the last year or two I have been posting my writings on Medium and that link is here.
Enjoy the holiday break, rest up and stay healthy.
For the last year or two I have been posting my writings on Medium and that link is here.
Enjoy the holiday break, rest up and stay healthy.
Posted at 06:37 AM | Permalink | Comments (0)
Photo credit: Nelson Designs https://www.youtube.com/watch?v=jOrwlhBNu3Y
Takeaways:
I have been working recently with a talented young professor on commercializing her mental health idea based in AI. This is just after finishing up a medical device project to design a wearable for monitoring symptoms of a particular disease. Both of these projects have the same challenge, and it is the biggest challenge in healthcare. Both company solutions have to change human behavior in order to have any benefit of value and that is a hard problem. It is also why so much of healthcare is so ineffective and eventually wasteful.
The question becomes why do some technologies in healthcare (and any industry) succeed and others fail. Yes, sometimes we get the problem wrong or the solution, but less well recognized is that the technology itself may never be purposeful. As stated so well in the blog Code Simplicity:
“In general, when technology attempts to solve problems of matter, energy, space, or time, it is successful. When it attempts to solve human problems of the mind, communication, ability, etc. it fails or backfires dangerously.”
If we look at the categories in healthcare with notable commercial success, we easily arrive at diagnostic devices and pharmaceuticals. Diagnostic devices give us a window into the human body (matter and energy) and pharmaceuticals change matter. If we look back at my two examples from the first paragraph, how could we turn changing human behavior challenges into problems of matter, energy, space and time. Although my solution follows, it should perhaps not be overlooked that these four factors related to technology mirror fundamental concepts from physics.
When we think about changing human behavior through healthcare technology, this is akin to taking abstract problems and making them tangible. If you are not following, remember Schopenhauer’s insight into art:
“Art makes the emotions tangible.”
Art is in effect a technology that translates the abstract emotion into a tangible form in matter. If we consider Maslow’s hierarchy and the highest level of satisfaction—self-actualization or aspirations, we realize that some of the greatest commercial successes translated abstract aspirations into tangible solutions. One might argue that the iPhone, the Model T Ford and photography made tangible respectively creativity, freedom of movement and self-esteem (at a whole new level).
If we can translate an abstract problem, changing human behavior, into something tangible, then we can apply the logic of the four factors from physics and effectively use technology. An example may help to illustrate. Before money we had barter, but in order to transition from barter to money what was the abstract thought that had to be made tangible? Value! Coins were the tangible vehicle, gold showed physically value and the monarch’s picture created trust (all consumer behavior is based on trust). If you did not notice we also just proved that money was a technology. Every change in money—bank accounts, credit cards, derivatives, etc.—were all changes in the tangible form of money. If you cannot see money as a technology, read Daniel Goetzmann’s excellent book, Money Changes Everything: How Finance Made Civilization Possible.
Now to consider how to use our abstract-tangible model in healthcare, lets think about smoking cessation. Suppose we put a $25 device on your wrist, which is only removable by a device that costs $500. The wrist device loudly alarms when it smells any smoke including cigarettes. We could add a CO2 monitor as well to add value for the customer. A loud embarrassing alarm would translate the desire to stop smoking into a tangible energy format—sound waves—and increase the likelihood to stop—especially if the smoke alarm continues throughout the entire cigarette. Chantix beware!
I like the concept of alarms to transfer intangible concepts like emotions and behaviors into tangible sound waves. With all the AI, sensors and cyber-physical research underway, many behaviors could eventually trigger alarms. I am sure there are other ways to make tangible desired behaviors, but the alarm illustrates the point. I think it is more energy efficient and effective than shocks on the wrist. The point, we only need some creativity around the solution to use the abstract-tangible framework in healthcare.
Posted at 07:07 AM in Intellectual Thought, New Business Ideas, Startup, Technology, Venture Capital | Permalink | Comments (0)
Tags: abstract, art, entrepreneurship, healthcare, money, tangible
Posted at 06:53 AM in Background, Current Affairs, Economic Development, Intellectual Thought, Urbanization, Web/Tech | Permalink | Comments (0)
Tags: 4IR, city, Club of Rome, paradigm, sustainability, technology, urbanization
This Fall I am teaching two courses at FIU in the Honors College:
Image credit: Tomorrow Today Global
Posted at 07:47 AM in Background, Books, education, Technology, Thinking, Web/Tech | Permalink | Comments (0)
Tags: 4IR, Carlota Perez, complexity, fourth industrial revolution, frameworks mental models, genius, industrial revolution, Ray Dalio, W. Brian Arthur, WEF
My professional life revolves around entrepreneurship in its many forms, the Fourth Industrial Revolution--4IR (that the World Economic Forum correctly started heralding a few years ago) and how these two themes intersect around opportunity, wealth creation and social innovation. One of the devices to understand the 4IR is what I call the Trilogy, which was written about by Daniel C. Wahl in the very good article, "Facing Complexity: Wicked Design Problems". The Trilogy, which is a device to simplify the 4IR, is that this revolution can be understood as the convergence of nature-design-technology. Until today I would have said go away and study complexity science, artificial intelligence, bio-mimicry, slime mold, design thinking and 10-20 other concepts and then the Trilogy is obvious. Today I had a realization.
Fashion represents the Trilogy. Please remember my twenty years in retail and retail consulting. Now one might argue that fashion has existed from before we left the caves (all of intellectual history beginning from the first drawing on a cave wall) and you would be correct. Remember, it could be that all of human history can be understood through the lens of the Trilogy-nature-design-technology (see this article on the Krebs Cycle of Creativity). Now back to explaining the Trilogy in terms of fashion.
Now almost everyone can understand fashion in terms of design, at least it is superficially obvious. Technology is much the same, with different fabrics and colors being the result of technology. Where it becomes interesting is when we consider the role of nature in fashion. Of course, nature is where we introduce the human-centric focus and that leads us to the drape of the clothing on the body, the equally important emotional engagement of the wearer and most importantly to the question of customer self-esteem. What the fashion example makes clear is that every consumer opportunity, product or solution should be considered in the terms of the trilogy, whether you were sitting outside a cave or a modern design studio. As you venture forth in the 4IR remember one does not understand fully until one can explain the issue or opportunity in terms of nature-design and technology.
Note: The Krebs Creativity Cycle is not obvious and takes awhile for people to appreciate its utility. I will do a followup post to explain its utility in more detail.
Posted at 07:00 AM in Background, Design, Intellectual Thought, Social Entrepreneurship, Technology, Thinking | Permalink | Comments (0)
Tags: 4IR, biology, complexity, design, engineering, fashion, Fourth Industrial Revolution, nature, technology
Most of my recent writing is on Medium. Really no particular reason, but longer articles look to be easier to create there.
Topics are still traditional and social entrepreneurship, creativity and learning and design thinking and complexity science. Increasingly I touch on the convergence of nature-design-technology, the trilogy of the Fourth Industrial Revolution.
Also, increasingly I am thinking about:
"Distributed ledger technology (DLT) is a digital system for recording the transaction of assets in which the transactions and their details are recorded in multiple places at the same time. Unlike traditional databases, distributed ledgers have no central data store or administration functionality." Google
“A complex adaptive system (CAS) is made up of independent self-organizing agents, stochastically interacting through networks, under the influence of infrastructure, technology and the environment, that gives rise to emergent properties and co-evolutionary dynamics.” RHH
Posted at 07:00 AM in Background, Intellectual Thought | Permalink | Comments (0)
This is a supplemental reading list I prepared for an 8-hour course in entrepreneurship that I was asked to create. List includes videos, Powerpoints, articles and books.
Posted at 05:33 PM in Startup | Permalink | Comments (0)
Tags: articles, books, Entrepreneurship, videos
My newest writing, The Power of Assumption in Entrepreneurship, is on Medium. The introduction to the article follows.
Introduction
Most of my books and major writings are prompted by a single comment or sentence that typically leads to two or three years of thinking about the related topic. This article is no exception and was prompted by a writer’s observation that every startup is based on a key assumption about the problem, the solution and scaling. These three assumptions can be simply illustrated by a proposed new medical device. The key assumption about the problem is whether the device correctly diagnoses the disease. Key assumption about the solution is whether doctors will use the device (and stop using their current approach). Key assumption about scaling might be getting FDA approval or Medicare reimbursement for a procedure using the device. It should be noted that once a key assumption is identified, it often leads to identifying other key assumptions about problem, solution or scaling. Such clear identification of assumptions also frequently focuses the entrepreneur on the viability of the business concept. The usefulness of this three-part technique and its easy adoption by entrepreneurs lead me to further study the concept of assumption.
Studying about assumptions, I realized that assumptions are one of those concepts that are critically important but with only limited writings on the subject. I see information theory, networks and incentives, as examples, to be similar subjects — critically important in multiple disciplines but almost ignored in popular and academic writing. While some would argue that these topics are widely written about by academics, I would point out that the themes in the academic articles have no practical application. For example, in information theory the positive asymmetry of information was presented by Kirzner to explain entrepreneurship and the negative asymmetry of information Spence used to explain poverty. However, I rarely see any discussion of asymmetry of information in the writing on poverty. The absence of writings on assumptions prompted me to write this article in an effort to facilitate practical applications about assumptions in entrepreneurship and related fields such as innovation and engineering.
While many terms have domain specific definitions or usage, especially in social, economic and political fields of study, “assumptions” is a term that remains unchanged as it crosses disciplines. Another concept that crosses domains unchanged is symbolic logic. Symbolic logic is a system of inference rules that dates back to Aristotle. What does the system of inference rules manipulate? Answer, the propositions, premises or assumptions in the argument. The entire nature of symbolic logic is domain agnostic and therein lies the “proof” for the first characteristic of assumptions — assumptions are domain agnostic, not changed in their behavior or definition by the domain. A simple example might clarify this point. A “set” in math is a “collection of individual objects which is itself an object” whereas in tennis a “set” is “the first player to win six or more games by two more games than the opponent, where a majority of sets alone determines the winner”. Obviously “set” is a domain specific term and “assumptions” is not.
The discussion of symbolic logic above reminds me of an important point. We cannot discuss assumptions without some references to philosophy, math and physics. George Polya, credited with coining the phrase “random walk” and a famous Stanford math professor, was once asked, “why did you study math?”. He responded, “I was too good for philosophy but not good enough for physics”. Any discussion of assumptions needs to include some philosophy, math and even physics, although the math and physics are very elementary and the philosophy may not even be identified as such. What is the significance of thinking about assumptions in terms of philosophy, math and physics? Philosophy, math and physics are the three ways to describe reality and the role of assumptions it turns out is a useful concept to better understand reality. This concept is fully developed in Section 2.
While philosophy, math and physics are widely disliked by many students, entrepreneurship and the related concept — social entrepreneurship — are increasingly popular with students at the five universities where I have taught entrepreneurship in various capacities over the last thirteen years. I have also designed, developed and executed two startup incubators and one accelerator in Miami, FL at Florida International University. Before that I built a billion-dollar publicly-traded company in Indonesia in seven years and served as the CFO of One Laptop per Child (OLPC). OLPC was a project that started at the Media Lab at MIT and gave me the chance to teach an IAP course in social entrepreneurship for seven years at MIT Sloan.
My practical experience combined with my academic pursuits have made me a serious student of entrepreneurship. One thing that I have realized is that entrepreneurship is best thought of as a process, whether one uses Eric Ries Lean Startup methodology or another approach. At every step in the process I have learned to identify the key assumption(s), to manage the validation of those assumptions as milestones and deliverables and to be extremely vigilant to not overlook a key assumption (as discussed in Section 4). Leading venture capitalist Mark Andreesseen put it well:
“So you come in and pitch to someone like us. And you say you are raising a B round. And the best way to do that with us is to say I raised a seed round, I achieved these milestones. I eliminated these risks. I raised the A round. I achieved these milestones. I eliminated these risks. Now I am raising a B round. Here are my milestones, here are my risks, and by the time I raise go to raise a C round here is the state I will be in.”
Note that milestones can also be intangible, like assumptions, and that such milestones and assumptions are linked to risk reduction. We will come back to this important point about the linkage between assumptions and risk in Section 3. I first explored the linkage between risk and assumption in my first book, Billion Dollar Company. Companies go out of business typically because they run out of cash. They run out of cash because they misjudge a known risk or miss an unknown risk. Systematically studying key assumptions in a business concept reduces the likelihood of unknown risks and may give new perspective on known risks, which in part explains why I keep writing about assumptions.
This article is organized in two parts, the first dealing with a definition of assumptions and some of their characteristics and the second part presenting some practical applications of assumptions in entrepreneurship…and many other fields. The Sections are shown below.
Part 1
Section I- Ignorance, Determinism and Complexity
Section II- Assumptions and Determinism
Section III- Pattern Recognition and Risk
Part 2
Section IV- Reframing the Problem
Section V- Additive vs Multiplicative
Section VI- What Physics Teaches Us
Section VII- Financial Modeling
Conclusions
The remainder of the article is here.
Posted at 07:09 AM in Background, Intellectual Thought, Startup | Permalink | Comments (0)
Tags: Assumption, entrepreneurship, Frank Knight, George Shackle, multiplicative
For the last five years most of my thinking and teaching has revolved around three major areas:
Today on Medium I published an essay on these subjects and how they explain many of the large market opportunities that consistently have repeated throughout history:
If anyone thinks the essay is suitable to develop as a book, let me know by email.
Posted at 07:18 AM in Background, Books, Startup, Strategy, Technology, Thinking, Venture Capital, Web/Tech | Permalink | Comments (0)
Tags: book, complexity, creativity, Entrepreneurship, learning
A few of the better books I read this year are shown below:
Best book was definitely From Material to Life, which I am going to teach in my Entrepreneurship, Design and Thinking course this spring.. Fantastic demonstration of how to approach an impossible problem--how did life emerge.
Elinor Ostrom is a manual for how to live in a Blockchain directed government less world, although she researched for much less aggressive purposes.
Everyone interested in social problems should read about agent-based modeling. I believe we are on the verge of modeling social problems to derive real insight.
Not a year for much light reading, but a great year for learning.
Posted at 06:41 AM in Background, Books, Current Affairs | Permalink | Comments (0)
Tags: Books 2017
The quote below is from Paul Heyne‘s 1982 speech “What Is the Responsibility of Business Under Democratic Capitalism?”
"The primary problem that modern, industrialized economic systems must solve is the problem posed by the scarcity of information. We are inclined to overlook these difficulties and to take their resolution for granted, because we take for granted the remarkable mechanism of social coordination through which we gather and disseminate the knowledge that is essential to the system’s functioning. In overlooking the knowledge or information problem, we focus undue attention on a different scarcity, the scarcity of goodwill. We erroneously suppose that goodwill can resolve problems that can in fact be resolved only through the accumulation of additional information. Moreover, many of our proposals for increasing the amount of goodwill in the economy fail completely to attain their objectives, but do manage to subvert the crucial information system."
Increasingly I come to the conclusion that social problems are caused by the asymmetry of information. Rarely do I see approaches that take this idea into consideration.
Posted at 12:54 PM in Background, Current Affairs, Economic Development, Social Entrepreneurship | Permalink | Comments (0)
Tags: information. economics
If you study complexity science you soon realize that reality is energy and information. If you study physics, one school of thinkers believes reality is binary [0,1] otherwise known as bits of information. This may not come as a surprise if we study Claude Shannon’s seminal work in information theory, which sparked the Third Industrial Revolution and the digital era. As we look at the Forth Industrial Revolution we see that information continues to be important in areas such as AI, IOT and robotics. So maybe we can conclude this information concept is important, even if we cannot tell what happened to Schrodinger’s cat or that tree in the forest.
Last week a friend was talking about healthcare and he asked me who had the most money in the healthcare system? The answer, the insurers. Who has the most information in healthcare? The answer, the insurers. Historically, those who controlled the greatest amount of information were able to amass the greatest amount of capital. If you think about the enormous valuations of Google, FB and Baidu, one realizes that their platforms have chokehold on information from which they extract enormous value.
If you study the Blockchain and its distributed network of highly secure information, one realizes that this infrastructure eliminates the opportunity for information choke points and the related value capture. Now you know why the non-speculators are excited about Blockchain. The economics of value creation through information will remain intact but the value will be shared widely and not concentrated the way it is today.
Posted at 06:19 AM in New Business Ideas, Technology, Thinking, Web/Tech | Permalink | Comments (1)
Tags: Blockchain, Capital, complexity, Information
This morning somebody asked me for a list of talks and workshops that I do. A current list is below.
Much of the content for these talks has been put together over the last 12-18 months from lectures I have given at various universities. Many people have heard me teach or speak on these topics at StartUP FIU. Many of my colleagues at StartUP FIU can also speak on these topics, if you wish.
Posted at 06:39 AM in Background, Books, Financial Crisis, Intellectual Thought, Presentation, Social Entrepreneurship, Speeches, Thinking | Permalink | Comments (0)
Tags: 4IR, Entrepreneurship, INNOVATION, Klaus Schwab, LEARNING, SOCIAL ENTREPRENEURSHIP, WEF
"The internet is entering a second era that’s based on Blockchain. The last few decades brought us the internet of information. We are now witnessing the rise of the internet of value. Where the first era was sparked by a convergence of computing and communications technologies, this second era will be powered by a clever combination of cryptography, mathematics, software engineering and behavioral economics."World Economic Fourum (WEF) Realizing the Potential of Blockchain
The Third Industrial Revolution (3IR) was marked by the emergence of computing and the conversion of information to digital formats. Starting in the early 1960s, and for the next forty years, the role of computing expanded largely in commerce and industry. With the advent of the personal computer and its increasing processing power, the widespread availability of the Internet and the emergence of cellular telephones as handheld computers, computing transitioned from a technology to a mainstay of business and personal life. Effectively, computing became like electricity--ubiquitous, cheap and easy to use in new applications.
While code and computing power were the original limiting factors, what now limits computing is the ability to correctly understand the social environment. Of course, this social environment is complex and therein lies the challenge for computing. Complex systems such as social systems are not deterministic but rather stochastic. Instead of using calculations we use computation, simulation and rules-based modeling. However, to properly develop these approaches we need disciplines such as game theory, behavioral economics and the social sciences such as psychology. This is the trend which the World Economic Fourum (WEF) highlighted above.
In simple terms it looks like computing has matured to the point where it needs to be multi-disciplinary in order to add further to its functionality...and in this case that means involving the social sciences to give insight into those pesky, complex humans.
Some articles on this theme:
If you want to understand the Blockchain philosophically and technically, the WEF paper referenced above is very good.
Posted at 07:30 AM in Intellectual Thought, Strategy, Technology | Permalink | Comments (0)
Tags: complexity, computation, Computing, game theory