Tag Archives: Tinkering

Tinkering and Innovation (without forgetting Christensen)

Tinkerings is not a word, I think, that is easily or commonly associated with innovation. And yet! It appears several times on this blog as indicated by the #tinkering tag. And here is the reference to a nice article by Paul Millier entitled The engineer, the tinkerer and the innovator (L’ingénieur, le bricoleur et l’innovateur). I’m not sure if you can have free access so here is a brief excerpt:

The other way of innovating is that of the “Tinkerer” [1], who, on the contrary, collects pieces to get an idea of ​​the whole. He collects disparate elements from the left and the right which he preserves “in case it could be useful”. He brings them together, he assembles them, he organizes and reorganizes until suddenly – almost surprisingly – it makes sense and the innovator can say “eureka”. Damn, but it’s obvious! How had we not thought about it before? The suitcase and the wheel existed separately from each other until the day when someone brought them together to make the suitcase on wheels. How could we imagine traveling without a suitcase on wheels today? This is a radical innovation.

[1] The term “Tinkering” used here has no derogatory character, quite the contrary. It corresponds to a profound distinction proposed by Claude Lévi Strauss in “La pense sauvage” (1962) between two approaches (both valid) that of the “scientist”, of the “engineer” who defines himself by a project, and that of the “Tinkerer” who deals with the “means at hand” (and therefore with the client in the case of innovation). This term is quite positive for this author as for all those who, in strategic analysis, semiotics or sociology, have appropriated this notion.

The word “Tinkering” in innovation, I discovered it with a magnificent text by Tom Wolfe, The Tinkerings of Robert Noyce, which I strongly encourage you to (re)read!

PS: Not mentioning the death of Clayton Christensen on 23 January 2020 would have been a mistake and just mentioning it as a postcript here is probably another one, but I could not say anything better than
1- The Economist – https://www.economist.com/business/2020/01/30/clayton-christensens-insights-will-outlive-him
2- or Nicolas Colin – https://europeanstraits.substack.com/p/what-europe-could-learn-from-clay
If you did not know Clayton Christensen, you are lucky, you can now discover his work!

Claude Shannon, an honorable mathematician?

A Mind at Play is a very interesting book for many reasons. The subtitle “How Claude Shannon Invented the Information Age” is one reason. It is a great biography of a mathematician whose life and production are not that well-known. And what is Information? I invite you to read these 281 pages or if you are too lazy or busy, at least the Shannon page on Wikipedia.

What I prefer to focus on here is the ever going tension between mathematics and engineering, between (what people sometimes like to oppose) pure and applied mathematics. Pure mathematics would be honorable, applied mathematics would not be, if we admit there is such a thing as pure or applied maths. So let me extract some enlighting short passages.

The typical mathematician is not the sort of man to carry on an industrial project. He is a dreamer, not much interested in things or the dollars they can be sold for. He is a perfectionist, unwilling to compromise; idealizes to the point of impracticality; is so concerned with the broad horizon that he cannot keep his eye on the ball. [Page 69]

In Chapter 18, entitled, Mathematical Intentions, Honorable and Otherwise, the authors dig deeper: Above all [the mathematician] professes loyalty to the “austere and often abtruse” world of pure mathematics. If applied mathematics concerns itself with concrete questions, pure mathematics exists for its own sake. Its cardinal questions are not “How do we encrypt a telephone conversation?” but rather “Are there infinitely many twin primes?” or “Does every true mathematical statement have a proof?” The divorce between the two schools has ancient origins. Historian Carl Boyer traces it to Plato, who regarded mere computation as suitable for a merchant or a general, who “must learn the art of numbers or he will not know how to array his troops.” But the philosopher must study higher mathematics, “because he has to arise out of the sea of change and lay hold of true being.” Euclid, the father of geometry, was a touch snobbier “There is a tale told of him that when one of his students asked of what use was the study of geometry, Euclid asked his slave to gibe the student threepence, ‘since he must make gain of what he learns’.”
Closer to our times, the twentieth-century mathematician G. H. Hardy would write what became the ur-text of pure math. A Mathematicians’ Apology is a “manifesto for mathematics itself,” which pointedly borrowed its title from Socrates’ argument in the face of capital charges. For Hardy, mathematical elegance was an end in itself. “beauty is the first test,” he insisted. “There is no permanent place in the world for ugly mathematics.” A mathematician, then, is not a mere solver of practical problems. He, “like a painter or a poet, is a maker of patterns. If his patterns are more permanent than theirs, it is because they are made with ideas.” By contrast, run-of-the-mill applied mathenatics was “dull,” “ugly”. “trivial” and “elementary”
And one (famous) reader of Shannon’s paper dismissed it with a sentence that would irritate Shannon’s supporters for years: “The discussion is suggestive throughout, rather than mathematical, and it is not always clear that the author’s mathematical intentions are honorable.” [Pages 171-2]

This reminds me of another great book I read last year Mathematics without apologies with one chapter entitled “Not Merely Good, True and Beautiful”. Shannon was a tinkerer, a term I discovered when I read Noyce‘s biography, another brilliant tinkerer. He was a brilliant tinkerer and he was a brilliant mathematician. He had himself strong vues about the quality of scientific research (pure or applied – who cares really?): we must keep our own house in first class order. The subject of information theory has certainly been sold, if not oversold. We should now turn our attention to the business of research and development at the highest scientific plane we can maintain. Research rather than exposition is the keynote, and our critical thresholds should be raised. Authors should submit only their best efforts, and these only after careful criticism by themselves and their colleagues. A few first rate research papers are preferable to a large number that are poorly conceived or half-finished. The latter are no credit to their writers and a waste of time to their reader. [Page 191]

A brilliant tinkerer as the video below shows…

and it seems he designed and built the (or one of the) first computer that played chess. He was a juggler and a unicycler.

In the chapter Constructive Dissatisfaction, the topic is intelligence. It requires talent and training, but also curiosity and even dissatisfaction: not the depressive kind of dissatisfaction (of which , he did not say, he had experienced his fair share), but rather a “constructive dissatisfaction”, or “a slight irritation when things don’t look quite right.” It was a least, a refreshing unsentimental picture of genius: a genius is simply someone who is usefully irritated. He had also proposed six strategies to solving problems: simplifying, encircling, restating, analyzing, inverting and stretching. You will need to read that section pages 217-20.

He was also a good investor. In fact he was close to a few founders of startups and had a privileged access to people like Bill Harrison (Harrison Laboratories) and Henry Singleton (Teledyne) and although he used his knowledge to analyze stock markets. Here is what he has to say about investing: A lot of people look at the stock price, when they should be looking at the basics company and its earnings. There are many problems concerned with the prediction of stochastic processes, for example the earnings of companies… My general feeling is that it is easier to choose companies which are going to succeed, than to predict short term variations, things which last only weeks or months, which they worry about on Wall Street Week. There is a lot more randomness there and things happen which you cannot predict, which cause people to sell or buy a lot of stock. To the point of answering to the question of the best information theory for investment with “inside information.” [Page 241-2]

A genius, a wise man, an honorable mathematician.

The Tinkerings of Robert Noyce – again

I read again The Tinkerings of Robert Noyce for reasons which are not directly related to Silicon Valley or Start-ups. A few days ago, I blogged about an extremely good article from the New Yorker – Our Town by Larissa MacFarquhar. The author illustrates some universal values of humankind through a small community in Iowa. And this reminded me of Tom Wolfe article written for Esquire Magazine in 1983. I found it again online here. It begins with : “In 1948 there were seven thousand people in Grinnell, Iowa, including more than one who didn’t dare take a drink in his own house without pulling the shades down first.” Robert Noyce studied at Grinnell College then left to MIT then to what would become Silicon Valley. Grinnell College was quite advanced in electronics. Tom Wolfe claims: “But MIT had proved to be a backwater… when it came to the most advanced form of engineering, solid-state electronics. Grinnell College, with its one thousand students, had been years ahead of MIT.” And later Grinnell College would invest in Intel, making its endowment unusually successful.

I was about to blog here about Wolfe’s article and (re)discovered, shame on me, that I had blogged about it in 2012! I had mentioneed the piece about the Wagon Wheel bar. Here it is again.

Or else he would leave the plant and decide, well, maybe he would drop in at the Wagon Wheel for a drink before he went home. Every year there was some place, the Wagon Wheel, Chez Yvonne, Rickey’s, the Roundhouse, where members of this esoteric fraternity, the young men and women of the semiconductor industry, would head after work to have a drink and gossip and brag and trade war stories about phase jitters, phantom circuits, bubble memories, pulse trains, bounceless contacts, burst modes, leapfrog tests, p-n junctions, sleeping-sickness modes, slow-death episodes, RAMs, NAKs, MOSes, PCMs, PROMs, PROM blowers, PROM burners, PROM blasters, and teramagnitudes, meaning multiples of a million millions. So then he wouldn’t get home until nine, and the baby was asleep, and dinner was cold, and the wife was frosted off, and he would stand there and cup his hands as if making an imaginary snowball and try to explain to her… while his mind trailed off to other matters, LSIs, VLSIs, alpha flux, de-rezzing, forward biases, parasitic signals, and that terasexy little cookie from Signetics he had met at the Wagon Wheel, who understood such things.

Here is another piece about stock options, which I discussed in another recent post: Rewarding Talent – A guide to stock options for European entrepreneurs by Index Ventures.

From the beginning Noyce gave all the engineers and most of the office workers stock options. He had learned at Fairchild that in a business so dependent upon research, stock options were a more powerful incentive than profit sharing. People sharing profits naturally wanted to concentrate on products that were already profitable rather than plunge into avant-garde research that would not pay off in the short run even if it were successful. But people with stock options lived for research breakthroughs. The news would send a semiconductor company’s stock up immediately, regardless of profits.

There would be so much more to say about this marvelous piece of Silicon Valley and American history. You should read it!

Seydoux, the founder of Parrot, about entrepreneurship and innovation

A recent publication by the excellent ParisTech Review draw my attention. It’s entitled Three lessons from Parrot’s saga et you can read the entire article here (www.paristechreview.com/2016/09/28/three-lessons-parrot-saga/)

I already posted about Parrot and its founder Henri Seydoux (see www.startup-book.com/2012/08/10/parrot-and-henri-seydoux-a-french-success-story/) and I was lucky to listen to him at EPFL in 2014. I encourage you to watch to his presentation below, where he gave five advice: follow your own ideas, people will help you, focus is essential, be cautious with money, and… good luck.

In this new series of advice, I did not only notice Seydoux’ three lessons (1- it’s perfectly possible to create an industrial company in France. In fact, it’s even easier than ever. 2- high technology works in cycles, and you can’t expect to sell the same product for decades. 3- the software industry is fundamentally oriented towards B2C) but also some striking points:
– Parrot was many times close to bankruptcy but thanks to the courage, vision and yes, luck of its founder, Parrot avoided the worst.
– To his regret, [he] never managed to convince French brands […]. No one is a prophet in his own country…
– To innovate, Seydoux created « internal start-ups », with small talented teams with “two main prohibitions: no specifications, no market research”. Some tinkering, trial and errors and “gradually, we accumulate knowledge and sometimes, it ends up working”.
In 2016, Parrot has a market cap. of €300M, sales of €300M and close to 1’000 employees. A beautiful European success story.

Elon Musk – the new Steve Jobs (part 2)

After reading chapters 8 & 9 of Elon Musk and after my recent post about the Tesla and SpaceX leader, I am now fully convinced Elon Musk is much more than Steve Jobs. He has brought back optimism to Silicon Valley, to the USA and maybe to the world. He has also brought back hardware and engineering in a world that was thinking everything was virtual and online. Mea culpa, I felt the same; I felt that software and intelligence was what was driving the world. Elon Musk has shown that tinkering, experimenting coupled with an ambitious vision could change the world.

elonmusk-vance

“When the launch was successful [SpaceX 4th launch but the 1st to be successful], everyone burst into tears”, Kimbal said. “It was one of the most emotional experiences I’ve had.” Musk left the control room and walked out of the factory floor, where he received a rock’s star welcome. “Well, that was freaking awesome,“ he said. “There are a lot of people who thought we couldn’t do it – a lot actually – but as the saying goes, ‘the fourth time is the charm’, right? There are only a handful of countries on Earth that have done this. It’s normally a country thing, not a company thing…. [Page 203]

But the reader should not forget the tough reality: For Gracias, the Tesla and SpaceX investor and Musk’s friend, the 2008 period told him everything he would ever need to know about Musk’s character. He saw a man who arrived in the United States with nothing, who had lost a child, who was being pilloried in the press by reporters and his ex-wife and who verged on having his life’s work destroyed. “He has the ability to work harder and endure more stress than anyone I’ve met”, Gracias said. “What he went through in 2008 would have broken anyone else. He didn’t just survive. He kept working and stayed focused.” That ability to stay focused in the midst of a crisis stands as one of Musk’s main advantages over other executives and competitors. “Most people who are under that sort of pressure fray,” Gracias said. “their decisions go bad. Elon gets hyperrational. He’s still able to make very clear, long-term decisions. The harder it gets, the better he gets. Anyone who saw what he went through firsthand came away with more respect for the guy. I’ve just never seen anything like his ability to take pain”. [Page 211]

Again, Musk is not afraid of risk-taking. As 2008 came to an end, Musk had run out of money […] The couple had to start borrowing hundreds of thousands of dollars from Musk’s friend Skoll and Riley’s parents offered to remortgage their house. Musk no longer flew his jet back and forth between Los Angeles and Silicon Valley. He took Southwest. [Pages 206-207] He manage to save Tesla, The deal ended up closing on Christmas Eve, hours before Tesla would have gone bankrupt. Musk had just a few hundred thousand dollars left and could not have made payroll the next day. […] On December 23, 2008, however, SpaceX received a shock. People inside NASA had backed SpaceX to become a supplier for the ISS. The company received $1.6 billion as payment for twelve flights to the Space Station. [Page 210]

It is also interesting to mention Musk’s hiring methods! The SpaceX hiring model places some emphasis on getting top marks at top schools. But most of the attention goes toward spotting engineers who have exhibited type A personality traits over the course of their lives. The company’s recruiters look for people who might excel at robot-building competitions or who are car-racing hobbyists who have built unusual vehicles. The object is to find individuals who ooze passion, can work well as part of a team, and have real-world experience bending metal. “Even if you’re someone who writes code for your job you need to understand how mechanical things work. We were looking for people that had been building things since they were little.” [Page 220] Interviews are tough with puzzles, code writing and Musk interviewed the first 1’000 employees de SpaceX.

I am far from finished but needs to end up for now with my usual cap. tables for Musk’s ventures: 1-Paypal, 2-Tesla Motors, 3-SolarCity which he did not found but backed from the early days and the two founders are his cousins, 4-finally a tentative cap. table based on what SpaceX announced.

1-Paypal
Musk-PayPal-Captable

2-Tesla Motors
Musk-Tesla-Captable

Musk-Tesla-Rounds

3-SolarCity
Musk-SolarCity-Captable

4-SpaceX
Musk-SpaceX-Captable

Invention is the Mother of Necessity!

I am reading the remarkable Guns, Germs, and Steel: The Fates of Human Societies by Jared Diamond.

Ggas_human_soc

I did not think initially that I would have anything to extract from it related to entrepreneurship and innovation. And I was wrong. I just read a section about human inventions and innovations, which I liked very much. Here it is.

THF STARTING POINT for our discussion is the common view expressed in the saying “Necessity is the mother of invention.” That is, inventions supposedly arise when a society has an unfulfilled need: some technology is widely recognized to be unsatisfactory or limiting. Would-be inventors, motivated by the prospect of money or fame, perceive the need and try to meet it. Some inventor finally comes up with a solution superior to the existing, unsatisfactory technology. Society adopts the solution if it is compatible with the society’s values and other technologies.
Quite a few inventions do conform to this commonsense view of necessity as invention’s mother. In 1942, in the middle of World War II, the U.S. government set up the Manhattan Project with the explicit goal of inventing the technology required to build an atomic bomb before Nazi Germany could do so. That project succeeded in three years, at a cost of $2 billion (equivalent to over $20 billion today). Other instances are Eli Whitney’s 1794 invention of his cotton gin to replace laborious hand cleaning of cotton grown in the U.S. South, and James Watt’s 1769 invention of his steam engine to solve the problem of pumping water out of British coal mines.
These familiar examples deceive us into assuming that other major inventions were also responses to perceived needs. In fact, many or most inventions were developed by people driven by curiosity or by a love of tinkering, in the absence of any initial demand for the product they had in mind. Once a device had been invented, the inventor then had to find an application for it. Only after it had been in use for a considerable time did consumers come to feel that they “needed” it. Still other devices, invented to serve one purpose, eventually found most of their use for other, unanticipated purposes. It may come as a surprise to learn that these inventions in search of a use include most of the major technological breakthroughs of modern times, ranging from the airplane and automobile, through the internal combustion engine and electric light bulb, to the phonograph and transistor. Thus, invention is often the mother of necessity, rather than vice versa.
A good example is the history of Thomas Edison’s phonograph, the most original invention of the greatest inventor of modern times. When Edison built his first phonograph in 1877, he published an article proposing ten uses to which his invention might be put. They included preserving the last words of dying people, recording books for blind people to hear, announcing clock time, and teaching spelling. Reproduction of music was not high on Edison’s list of priorities. A few years later Edison told his assistant that his invention had no commercial value. Within another few years he changed his mind and did enter business to sell phonographs but for use as office dictating machines. When other entrepreneurs created jukeboxes by arranging for a phonograph to play popular music at the drop of a coin, Edison objected to this debasement, which apparently detracted from serious office use of his invention. Only after about 20 years did Edison reluctantly concede that the main use of his phonograph was to record and play music.
The motor vehicle is another invention whose uses seem obvious today. However, it was not invented in response to any demand. When Nikolaus Otto built his first gas engine, in 1866, horses had been supplying people’s land transportation needs for nearly 6,000 years, supplemented increasingly by steam-powered railroads for several decades. There was no crisis in the availability of horses, no dissatisfaction with railroads.
Because Otto’s engine was weak, heavy, and seven feet tall, it did not recommend itself over horses. Not until 1885 did engines improve to the point that Gottfried Daimler got around to installing one on a bicycle to create the first motorcycle; he waited until 1896 to build the first truck.
In 1905, motor vehicles were still expensive, unreliable toys for the rich. Public contentment with horses and railroads remained high until World War I, when the military concluded that it really did need trucks. Intensive postwar lobbying by truck manufacturers and armies finally convinced the public of its own needs and enabled trucks to begin to supplant horse-drawn wagons in industrialized countries. Even in the largest American cities, the changeover took 50 years.
Inventors often have to persist at their tinkering for a long time in the absence of public demand, because early models perform too poorly to be useful. The first cameras, typewriters, and television sets were as awful as Otto’s seven-foot-tall gas engine. That makes it difficult for an inventor to foresee whether his or her awful prototype might eventually find a use and thus warrant more time and expense to develop it. Each year, the United States issues about 70,000 patents, only a few of which ultimately reach the stage of commercial production. For each great invention that ultimately found a use, there are countless others that did not. Even inventions that meet the need for which they were initially designed may later prove more valuable at meeting unforeseen needs. While James Watt designed his steam engine to pump water from mines, it soon was supplying power to cotton mills, then (with much greater profit) propelling locomotives and boats.

THUS, THE COMMONSENSE view of invention that served as our starting point reverses the usual roles of invention and need. It also overstates the importance of rare geniuses, such as Watt and Edison. That “heroic theory of invention,” as it is termed, is encouraged by patent law, because an applicant for a patent must prove the novelty of the invention submitted. Inventors thereby have a financial incentive to denigrate or ignore previous work. From a patent lawyer’s perspective, the ideal invention is one that arises without any precursors, Like Athene springing fully formed from the forehead of Zeus.
ln reality, even for the most famous and apparently decisive modern inventions, neglected precursors lurked behind the bald claim “X invented Y.” For instance, we are regularly told, “James Watt invented the steam engine in 1769,” supposedly inspired by watching steam rise from a teakettle’s spout. Unfortunately for this splendid fiction, Watt actually got the idea for his particular steam engine while repairing a model of Thomas Newcomen’s steam engine, which Newcomen had invented 57 years earlier and of which over a hundred had been manufactured in England by the time of Watt’s repair work. Newcomen’s engine, in turn, followed the steam engine that the Englishman Thomas Savery patented in 1698, which followed the steam engine that the Frenchman Denis Papin designed (but did not build) around 1680, which in turn had precursors in the ideas of the Dutch scientist Christiaan Huygens and others. All this is not to deny that Watt greatly improved Newcomen’s engine (by incorporating a separate steam condenser and a double-acting cylinder), just as Newcomen had greatly improved Savery’s.
Similar histories can be related for all modern inventions that are adequately documented. The hero customarily credited with the invention followed previous inventors who had had similar aims and had already produced designs, working models, or (as in the case of the Newcomen steam engine) commercially successful models. Edison’s famous “invention” of the incandescent light bulb on the night of October 21, 1879, improved on many other incandescent light bulbs patented by other inventors between 1841 and 1878. Similarly, the Wright brothers’ manned powered airplane was preceded by the manned unpowered gliders of Otto Lilienthal and the unmanned powered airplane of Samuel Langley; Samuel Morse’s telegraph was preceded by those of Joseph Henry, William Cooke, and Charles Wheatstone; and Eli Whitney’s gin for cleaning short-staple (inland) cotton extended gins that had been cleaning long-staple (Sea Island) cotton for thousands of years.
All this is not to deny that Watt, Edison, the Wright brothers, Morse, and Whitney made big improvements and thereby increased or inaugurated commercial success. The form of the invention eventually adopted might have been somewhat different without the recognized inventor’s contribution. But the question for our purposes is whether the broad pattern of world history would have been altered significantly if some genius inventor had not been born at a particular place and time. The answer is clear: there has never been any such person. All recognized famous inventors had capable predecessors and successors and made their improvements at a time when society was capable of using their product. As we shall see, the tragedy of the hero who perfected the stamps used for the Phaistos disk was that he or she devised something that the society of the time could not exploit on a large scale.
[Pages 242-245]

After the Black Swan, Taleb strikes again with Antifragile

Antifragile, things that gain from disorder by Nassim Nicholas Taleb
Antifragile-Taleb

Here’s probably one of the toughest post I ever had to write and I am not sure it is a good one, even if the topic I am addressing is great and important. But it’s been a challenge to summarize what I learnt: Nicholas Nassim Taleb gives in this follow-up to the Black Swan a very interesting analysis of how the world can be less exposed to Black Swans, not by becoming more robust only, but by becoming antifragile, i.e. by benefiting from random events. His views include tensions between the individual and the groups, how distributed systems are more robust than centralized ones, how small unites are less fragile than big ones. This does not mean Taleb is against orgamizations, governments or laws as too little intervention induces totally messy situations. It is about putting the cursor at the right level. Switzerland represents for Taleb a good illustration of good state organizations with little central government, a lot of local responsibility. He has similar analogies for the work place, where he explains that an independent worker, who knows well his market, is less fragile to crises than big corporations and their employees. One way to make systems less fragile is to put some noise, some randomness which will stabilize them. This is well-known in science and also in social science. Just remember Athens was randomly nominating some of its leaders to avoid excess!

You can listen to Taleb here:

Now let me quote the author. These are notes only but for serious reviews, visit the author’s website, www.fooledbyrandomness.com/. First Taleb is, as usual, unfair but maybe less than in the Black Swan. Here is an example: “Academics (particularly in social science) seem to distrust each other, […] not to mention a level of envy I have almost never seen in business… My experience is that money and transactions purify relations; ideas and abstract matters like “recognition” and “credit” warp them, creating an atmosphere of perpetual rivalry. I grew to find people greedy for credentials nauseating, repulsive, and untrustworthy.” [Page 17] Taleb is right about envy and rivalry but wrong in saying it is worse in academia; I think it is universal! In politics for example. But when money is available, maybe rivalry counts less than where there is little.

Nassim Nicholas Taleb

Now a topic close to my activity: “This message from the ancients is vastly deeper than it seems. It contradicts modern methods and ideas of innovation and progress on many levels, as we tend to think that innovation comes from bureaucratic funding, through central planning, or by putting people through a Harvard Business School class by one Highly Decorated Professor of Innovation and Entrepreneurship (who never innovated anything) or hiring a consultant (who never innovated anything). This is a fallacy – note for now the disproportionate contribution of uneducated technicians and entrepreneurs to various technological leaps, from the Industrial Revolution to the emergence of Silicon Valley, and you will see what I mean.” [Page 42] [Extreme and unfair again, even if not fully wrong!]

“The antifragility of some comes necessarily at the expense of the fragility of others. In a system, the sacrifices of some units – fragile units, that is, or people – are often necessary for the well-being of other units or the whole. The fragility of every start-up is necessary for the economy to be antifragile, and that’s what makes, among other things, entrepreneurship work: the fragility of the individual entrepreneurs and their necessarily high failure rate”. [Page 65] What surprised me later is that Taleb shows that this is true of restaurants (not many succeed) as much as of high-tech start-ups. So it is not only about the uncertainty of new markets, but about uncertainty above all.

Mathematics of convexity

I have to admit Taleb is not easy to read. Not because it is complex (sometimes his ideas are pure common sense), but because it is dense with different even if consistent ideas. The book is divided in 25 chapters, but also in 7 books. In fact, Taleb insists on it, he might have written 7 different books! Even his mathematics is simple. His definition of convexity is a little strange though I found it interested (I teach convex optimization, and you might not know, it was the topic of my PhD!).

Jensen inequality is interesting [Pages 342, 227 – Jensen was an amateur mathematician!]– the convex transformation of a mean is less or equal than the mean after convex transformation. Again individual (concave, we die) vs. collective (convex, antifragile, benefits from individual failures). So risk taking is good for collectivity if with insurance mechanisms. Risk taking + insurance vs. speculation with no value added. An example of a short and deep idea: “Decision making is based on payoffs, not knowledge”. [Page 337]

“Simply, small probabilities are convex to errors of computation. One needs a parameter, called standard deviation, but uncertainty about standard deviation has the effect of making the small probabilities rise. Smaller and smaller probabilities require more precision in computation. In fact small probabilities are incomputable, even if one has the right model – which we of course don’t.” [Taleb fails to mention Poincare yet he quoted him in the Black Swan, but whatever.]

A visible tension between individual and collective interests

Quotes again: “What the economy, as a collective, wants [business school graduates] to do is not to survive, rather to take a lot, a lot of imprudent risks themselves and be blinded by the odds. Their respective industries improve from failure to failure. Natural and nature-like systems want some overconfidence on the part of the individual economic agents, i.e., the overestimation of their chances of success and underestimation of the risks of failure in their business, provided their failure does not impact others. In other words, they want local, but not global overconfidence”. […] In other words, some class of rash, even suicidal, risk taking is healthy for the economy – under the conditions that not all people take the same risks and that these risks remain small and localized. Now, by disrupting the model, as we will see, with bailouts, governments typically favor a certain class of firms that are large enough to require being saved in order to avoid contagion to other businesses. This is the opposite of healthy risk taking; it is transferring fragility from the collective to the unfit. […] Nietzsche’s famous expression “what does not kill me makes me stronger” can be easily implemented as meaning Mithridatization or Hormesis but it may also mean “what did not kill me did not make me stronger, but it spared me because I am stronger than others; but it killed others and the average population is now stronger because the weak are gone”. […] This visible tension between individual and collective interests is new in history. […] Some of the ideas about fitness and selection are not very comfortable to this author, which makes the writing of some sections rather painful – I detest the ruthlessness of selection, the inexorable disloyalty of Mother Nature. I detest the notion of improvement thanks to harm to others. As a humanist, I stand against the antifragility of systems at the expense of individuals, for if you follow the reasoning, this makes us humans individually irrelevant. ” [Pages 75-77]

A National Entrepreneur Day

“Compare the entrepreneurs to the bean-counting managers of companies who climb the ladder of hierarchy with hardly ever any real downside. Their cohort is rarely at risk. My dream – the solution – is that we would have a National Entrepreneur Day, with the following message: Most of you will fail, disrespected, impoverished, but we are grateful for the risks you are taking and the sacrifices you are making for the sake of the economic growth of the planet and pulling others out of poverty. You are the source of our antifragility. Our nation thanks you.” [Page 80]

Local distributed systems, randomness and modernity

“You never have a restaurant crisis. Why? Because it is composed of a lot of independent and competing small units that do not individually threaten the system and make it jump from one state to another. Randomness is distributed rather than concentrated.” [Page 98]

“Adding a certain number of randomly selected politicians to the process can improve the functioning of the parliamentary system.” [Page 104]

“Modernity is the humans’ large-scale domination of the environment, the systematic smoothing of the world’s jaggedness, and the stifling of volatility and stressors. We are going into a phase of modernity marked by the lobbyist, the very, very limited liability corporation, the MBA, sucker problems, secularization, the tax man, fear of the boss…” [Page 108]

“Iatrogenics means literally “caused by the healer”. Medical error still currently kills between three times (as accepted by doctors) and ten times as many people as car accidents in the United States, it is generally accepted that harm from doctors – not including risks from hospitals germs – accounts for more deaths than any single cancer. Iatrogenics is compounded by the “agency problem” which emerges when one party (the agent) has personal interested that are divorced from those of the one using his services (the principal). An agency problem is present with the stockbroker and medical doctor whose ultimate interest is their own checking account, not your financial and medical health.” [Pages 111-112]

Theories and intervention.

“Theories are super-fragile outside physics. The very designation “theory” is even upsetting. In social science, we should call these constructs “chimeras” rather than theories. [Now you understand why Taleb has many enemies.] A main source of the economic crisis started in 2007 in the Iatrogenics of the attempt by […] Alan Greenspan to iron out the “boom-bust” cycle which caused risks to go hide under the carpet. The most depressing part of the Greenspan story is that the fellow was a libertarian and seemingly convinced of the idea of leaving systems to their own devices; people can fool themselves endlessly. […] The argument is not against the notion of intervention; in fact I showed above that I am equally worried about under-intervention when it is truly necessary. […] We have a tendency to underestimate the role of randomness in human affairs. We need to avoid being blinded to the natural antifragility of systems, their ability to take care of themselves and fight our tendency to harm and fragilize them by not giving them a chance to do so. […] Alas, it has been hard for me to fit these ideas about fragility within the current US political discourse. The democratic side of the US spectrum favors hyper-intervention, unconditional regulation and large government, while the Republican side loves large corporations, unconditional deregulation and militarism, both are the same to me here. Let me simplify my take on intervention. To me it is mostly about having a systematic protocol to determine when to intervene and when to leave systems alone. And we may need to intervene to control the iatrogenics of modernity – particularly the large-scale harm to the environment and the concentration of potential (though not yet manifested) damage, the kind of thing we only notice when it is too late. The ideas advanced here are not political, but risk-management based. I do not have a political affiliation or allegiance to a specific party; rather, I am introducing the idea of harm and fragility into the vocabulary so we can formulate appropriate policies to ensure we don’t end up blowing up the planet and ourselves.” [Pages 116-118]

“To conclude, the best way to mitigate interventionism is to ration the supply of information. The more data you get, the less you know.” [Page 128]

“Political and economic “tail” events are unpredictable and their probabilities are not scientifically measurable.” [Page 133]

The barbell strategy and optionality

“The Barbell strategy is a way to achieve anti-fragility, by decreasing downside rather than increasing upside, by lowering exposure to negative Black Swans. So just as Stoicism is the domestication, not the elimination, of emotions, so is the barbell a domestication, not the elimination, of uncertainty.” [Page 159] “It is a combination of two extremes, one safe and one speculative, deemed more robust than a monomodal strategy. In biological systems, the equivalent of marrying an accountant and having an occasional fling with a rock star; for a writer, getting a stable sinecure and writing without the pressures of the market. Even trial and error are a form of barbell.” [Glossary page 428]

“The strength of the computer entrepreneur Steve Jobs was precisely in distrusting market research and focus groups – those based on asking people what they want – and following his own imagination, his modus was that people don’t know what they want until you provide them with it.” [Page 171]

“America’s asset is simply risk taking and the use of optionality, the remarkable ability to engage in rational forms of trial and error, with no comparative shame in failing, starting again and repeating failure. In modern Japan, by contrast, shame comes, with failure, which causes people to hide risks under the rug, financial or nuclear.”

“Nature does a California-style “fail early” – it has an option and uses it. Nature understands optionality effects better than humans. […] The idea is voiced by Steve Jobs in a famous speech: “Stay hungry, stay foolish.” He probably meant “Be crazy but retain the rationality of choosing the upper bound when you see it.” Any trial and error can be seen as the expression of an option, so long as one is capable of identifying a favorable result and exploiting it.” [Page 181]

“Option is a substitute for knowledge- actually I don’t understand what sterile knowledge is, since it is necessarily vague and sterile. So I make the bold speculation that many things we think are derived by skill come largely from options, but well-used options, much like Thales’s situation [who had an option with olive presses – pages 173-174] rather than from what we claim to be understanding.” [Page 186]

Taleb is skeptical with experts, with anyone believing in a linear model academia -> applied science ->practice (“lecturing birds how to fly”); he believes in tinkering, heuristics, apprenticeship, and makes again many enemies for free! He claims the jet engine, financial derivatives, architecture, medicine were first developed by practitioners and then theorized by scientists, not invented or discovered by them.

Tinkering vs. research

“There has to be a form of funding that works. By some vicious turn of events, governments have gotten huge payoffs from research, but not as intended – just consider the Internet. It is just that functionaries are too teleological in the way they look for things and so are large corporations. Most large companies, such as Big Pharma, are their own enemies. Consider blue sky research, whereby grants and funding are given to people, not projects, and spread in small amounts across many researchers. It’s been reported that in California, venture capitalists tend to back entrepreneurs, not ideas. Decisions are largely a matter of opinion, strengthened with who you know. Why? Because innovations drift, and one needs flâneur-like abilities to keep capturing the opportunities that arise. The significant venture capital decisions were made without real business plans. So if there was any analysis, it had to be of a backup, confirmatory nature. Visibly the money should go to the tinkerers, the aggressive tinkerers who you trust will milk the option.” [Page 229]

“Despite the commercial success of several companies and the stunning growth in revenues for the industry as a whole, most biotechnology firms earn no profit.” [Page 237] [Optionality again]

“(i) Look for optionality; in fact, rank things according to optionality, (ii) preferably with open-ended, not closed-ended, payoffs; (iii) do not invest in business plans but in people, so look for someone capable of changing six or seven times over his career, or more (an idea that is part of the modus operandi of the venture capitalist Marc Andreessen); one gets immunity from the backfit narratives of the business plan by investing in people. Make sure you are barbelled, whatever that means in your business.” [Page 238]

“I did here just debunk the lecturing-Birds-How-to-Fly epiphenomenon and the “linear model”, suing simple mathematical properties of optionality. There Is no empirical evidence to support the statement that organized research in the sense it is currently marketed leads to great things promised by universities. [Cf also Thiel lamentations about the promise of technologies – http://www.startup-book.com/2010/10/12/tech-equals-salvation/ ] Education is an institution that has been growing without external stressors; eventually the thing will collapse.” [A conclusion to book IV, page 261]

Why is fragility non linear?

“For the fragile, the cumulative effect of small shocks is smaller than the single effect of an equivalent single large shock. For the antifragile, shocks bring more benefits (equivalently, less harm) as their intensity increases (up to a point).”

Via negativa

“We may not need a name for or even an ability to express anything. We may just say something about what it is not. Michelangelo was asked by the pope about the secret of his genius, particularly how he carved the statue of David. His answer was: It’s simple, I just remove everything that is not David.” [Page 302-304]

[…] “Charlatans are recognizable in that they will give you positive advice. Yet in practice, it is the negative that’s used by the pros. One cannot really tell if a successful person has skills, or if a person with skills will succeed – but we can pretty much predict the negative, that a person totally devoid of skills will eventually fail.”

[…] “The greatest – most robust – contribution to knowledge consist in removing what we think is wrong. We know a lot more what is wrong than what is right. Negative knowledge is more robust to error than positive knowledge. […] Since one small observation can disprove a statement, while millions can hardly confirm it [The Black Swan!], disconfirmation is more rigorous than confirmation. […] Let us say that, in general, failure (and disconfirmation) are more informative than success and confirmation.”

[Funnily, I remember the main critics against my book were the lack of [positive] proposal in the end. I should have said there we many about what not to do!]

“Finally, consider this modernized version in a saying from Steve Jobs: “People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.” [Page 302-304]

Less is more

“Simpler methods for forecasting and inference can work much, much better than complicated ones. “Fast and frugal” heuristics make good decisions despite limited time. First extreme effects: there are domains in which the rare event (good or bad) plays a disproportionate share and we tend to be blind to it. Just worry about Black Swan exposures and life is easy. There may not be an easily identifiable cause for a large share of the problems, but often there is an easy solution, sometimes with the naked eye rather than the use of the complicated analyses. Yet people want more data to solve problems.” [Page 305-306]

“The way to predict rigorously is to take away from the future, reduce from it things that do not belong to the coming times. What is fragile will eventually break, and luckily we can easily tell what is fragile. Positive Black Swans are more unpredictable than negative ones. Now I insist on the via negativa method of prophecy as being the only valid one.” [Page 310]

“For the perishable, every additional day in the life translates into a shorter additional life expectancy. For the non perishable, every additional day may imply a longer life expectancy. On general, the older the technology, the longer it is expected to last. I am not saying that all technologies do not age, only that those technologies that were prone to aging are already dead.” [Page 319]

“How can we teach children skills for the twenty-first century, since we do not know which skills will be needed? Effectively my answer would make them read the classics. The future is in the past. Actually there is an Arabic proverb to that effect: he who does not have a past has no future.” [Page 320]

[As can be read later in the book Taleb does not like the Bay Area culture. And it is no coincidence, it is a region with nearly no past, nearly no history, but it certainly help it create Silicon Valley innovations…]

“If you have an old oil painting and a flat screen television, you will never mind changing the television, not the painting. Same with an old fountain pen and the latest Apple computer; [Taleb is really cautious with modernity and innovation, even if a user of it. With architecture, he has similar concerns. Again he prefers tradition to aggressive modernity. Same with the metric system vs. old methods] Top-down is usually irreversible, so mistakes tend to stick, whereas bottom-up is gradual and incremental, with creation and destruction along the way, thought presumably with a positive slope.” [Pages 323-24]

“So we can apply criteria of fragility and robustness to the handling of information – the fragile in that context is, like technology, what does not stand the test of time. […] Books that have been around for ten years will be around for ten more; books that have been around for two millennia should be around for quite a bit of time. […] The problem in deciding whether a scientific result or a new “innovation” is a breakthrough, that is, the opposite of noise, is that one needs to see all aspects of the idea – and there is always some opacity that time, and only time, can dissipate.” [Page 329]

“Now, what is fragile? The large, optimized, overreliance on technology, overreliance on the so-called scientific method instead of age-tested heuristics.”

“By issuing warnings based on vulnerability – that is, substractive prophecy – we are closer to the original role of the prophet: to warn, not necessarily to predict, and to predict calamities if people don’t listen.”

Ethics

“Under opacity and complexity, people can hide risks and hurt others. Skin in the game is the only true mitigator of fragility. We have developed a fondness for neomanic complication over archaic simplicity. […] The worst problem of modernity lies in the malignant transfer of fragility and antifragility from one party to the other, with one getting the benefits, the other one (unwittingly) getting the harm, with such transfer facilitated by the growing wedge between the ethical and the legal. Modernity hides it especially well. It is of course an agency problem.” [Page 373]

[You can/should have a look at table 7, page 377]

“In traditional societies, a person is only respectable and as worthy as the downside he (or, more, a lot more, than expected, she) is willing to face for the sake of others.” [Page 376]

“I want predictors to have visible scars on their body from prediction errors, not distribute these errors to society.” [Page 386]

[Don Quixote was already the sign of the end of the heroism, of the ethical behavior. Taleb’s models are Malraux and Ralph Nader – “the man is a secular saint” [Page 394]. His enemies Thomas Friedman, Rubin and Stieglitz]

[Is “skin in the game” the only way? The only solution? What about transparency?]

About Science

“Science must not be a competition; it must not have rankings – we can see how such a system will end up blowing up. Knowledge must not have an agency problem. One doctoral student once came to tell me that he believed in my ideas of fat tails and my skepticism of current methods of risk management, but that it would not help him get an academic job. “It’s what everybody teaches and uses in papers” he said. Another student explained that he wanted a job at a good university, so he could make money testifying as an expert witness – they would not buy my idea on robust risk management because “everyone uses these textbooks”. [Page 419]

[So true! Check The Trouble with Physics.]

Conclusion

“All I want is to remove the optionality, reduce the antifragility of some at the expense of others. It is simple via negativa. […] The golden rule: “Don’t do unto others what you don’t want them to do to you”. […] Everything gains or loses from volatility. Fragility is what loses from volatility or uncertainty. […] Time is volatility. Education in the sense of the formation of the character, personality, and acquisition of true knowledge, likes disorder; label-driven education and educators abhor disorder. Innovation is precisely something that grains from uncertainty.” [Pages 420-22]

“It so happens that everything nonlinear is convex, concave or both. […] We can build Black-Swan-protected systems thanks to detection of concavity, […] and with a mechanism called convex transformation, the fancier name for the barbell. […] Distributed randomness (as opposed to the concentrated type) is a necessity.”

[General comments]

Taleb sometimes gives the feeling of contradictions: marketing is bad, but Steve Jobs is great; barbell strategy and optionality is great, but isn’t it about risks and downsides transferred to others [Isn’t Thales a pure speculator?], cigarettes are bad but traditions are good.

Also this love of tradition makes people with more background at ease to take risks with barbell strategy; but what about the poor with nothing to lose? Benefits might statistically go to those who already have… [It reminds the story told by J.-B. Doumeng: It is a millionaire who recounts his difficult beginnings: “I bought an apple 50 cents, I polished it to shine and I sold it for one franc. With this, I bought two apples 50cts, I carefully polished and I sold them 2 Fr after a moment, I could buy a cart to sell my apples and then I made a big inheritance … “]

You now know why it has been a challenge. A very strange, dense, fascinating book, but if you like these concepts, you must read Antifragile. In fact you must read the Black Swan first, if you have not and if you like it, I am sure you will read Antifragile.

The Apple Revolution

I have not read (yet) Isaacson’ authorized biography of Steve Jobs but found (by pure accident) another recent, funny an really great book, The Apple Revolution. Interesting too and somewhat related to a previous blog I published on Robert Noyce and the culture of Silicon Valley. As important is the subtitle: Steve Jobs, the Counterculture and How the Crazy Ones Took Over the World.

Dormehl, the author, is convincing when he explains that Silicon Valley is the result of the counter-culture as much as the Midwest engineers coming to SV. Noyce might have agreed! “This ideological divide is not uncommon. Silicon Valley has long been defined by the innate tension between the technologist’s urge to share information and the industrialist’s incentive to profit. […] There were aspects of the counterculture that were staunchly anti-capitalists in their views. […] One of them was definitely Marxist and the other was largely apolitical.[..] “Do you own thing” easily translated into “Start your own business”. [Pages 61-63] “Only in Silicon Valley could starting a business be read as an act of rebellion.” [Page 169]

There are so many (unknown-to-me) anecdotes that I will only mention a few. For example, I did not know about Ron English, the guerrilla street artist who circumvented Apple’s billboards using murderer Charles Manson.

“The people who built Silicon Valley were engineers.” Jobs told wired in 1996. “They learned business, they learned a lot of different things, but they had a real belief that humans – if they worked hard with other creative, smart people,- could solve most of the humankind’s problems. I believe that very much.” [Pages 7-8]

At the same time, the counter-culture, the hacker culture has been critical [page 17]:
– Access to computers – and anything which might teach you something about the way the world works – should be unlimited and total;
– All information should be free;
– Mistrust authority – promote decentralization;
– Hackers should be judged by their hacking, not bogus criteria such as degrees, age, race, or position;
– You can create art and beauty on a computer;
– Computers can change your life for the better.

A funny anecdote is a woman going to the Homebrew Computer Club because nearly all the attendees were male. Her verdict: “the odds were good, but the goods were odd”. (Page 25)

You will learn about the history of the Apple logo [pages 85-90] and the first killer apps (word processing and spreadsheets). I did not know Paul Lutus and John Draper. And what about Apple first ad campaigns!


(Go to youtube at http://www.youtube.com/embed/J0Rs7d16jhU if you do not see the embedded frame!)


(Go to youtube at http://www.youtube.com/embed/HhsWzJo2sN4 if you do not see the embedded frame!)

You will obviously read about the mouse, about interactions with Xeroc PARC and also learn about the early days of the MacIntosh concept and its father, Jef Raskin who yanked sharply in the arm of a young developer when he saw his face and guessed his thinking, labeling as “wet-behind-the-ears marketing puke, dressed in a ridiculous chalk-pinstripe, complete with banker’s vest, shoes off, stinky feet up […] an abrasive punk in need of a slap” a Steve Jobs he had not recognized! [Page 189]

“The Macintosh project represented the first time – outside the Garage in which the Apple II had been built – that Apple would put together the kind of small, dedicated team that would produce some of the company’s greatest products in later years. Jobs referred to this company-within-a-company approach as returning to the “metaphorical garage”. The Macintosh team still had all the piss and vinegar of a start-up. “Innovation has nothing to do with how many R&D dollars you have” Jobs said. “When Apple came up with the Mac, IBM was spending at least one hundred times more on R&D. It’s not about money. It’s about the people you have, how you’re led, and how much you get it.” [Page 202]

You will also read about the legal issued Apple faced in the music field and the funny origin of the Sosumi. It’s not only about Apple, you will read about Next early team, Dan’l Lewin, Rich Page, George Crow, Bud Tribble Susan Barnes an Susan Care as well as Pixar’s founding team, Alvy Ray Smith, Edwin Earl Catmull and John Lasseter ; “Pundits even came up with a tongue-in-cheek name for the unlikely convergence of Silicon Valley technology and Hollywood moviemaking. They called it Sillywood.“ [Page 303] So you can comment my tentative cap. table of NeXT (see below) when acquired by Apple.

Another piece of video is Pixar first work, The adventures of Andre and Wally B. If Jobs did OK with Next, what about with Pixar. He got 70% for $10M then Smith and Catmull each had 4%. But jobs got 100% after putting $50M. [Pages 335-336] There is also the funny anecdote that the iMac could have been called the MacMan, sounding “like a cross between the video game Pac-Man and Sony’s handheld music player, the Walkman.” [Page 413]. There is also an analysis of intellectual property [Pages 430-431] “Whether or not a breakdown i traditional copyright laws odes, in fact, lead to a similar decline in creativity and innovation remains a hotly contested debate” adding that “Gates, typically referred as imaginative”, and having “never invented anything” is wrong. “Gates had invented the notion that Software (be it entire operating systems or simple files) could be sold. Jobs merely reframed the idea as a necessary protective measure for creativity.” Apparently Dormehl advises to read Lawrence Lessig’s  The Future of Ideas.

(Go to youtube at http://www.youtube.com/embed/W1rpE2c1Vco if you do not see the embedded frame!)

In the final chapters, Dormehl addresses the Apple paradox of the counterculture becoming mainstream. He quotes Norman Mailer [Page  384] “One is Hip or one is Square” and he adds [Page 408] that “no one better summarized the new ruling creative class of boomer bobos (that’s bourgeois bohemians) than Steve Jobs. […] They are prosperous without seeming greedy; they pleased their elders without seeming conformist; they have risen towards the top without too obviously looking down on those below; thy have achieved success without committing certain socially sanctioned affronts to the ideal of social equality; they have constructed a prosperous lifestyle while avoiding the old clichés of conspicuous consumption.”  Then [Page  456] Paul Lutus describes the App Store as a “classic marketer’s dream, with too many programmers with too many programs chasing too few buyer dollars, and the marketer in the middle the only really cashing in.” (Perfect capitalism, long if ever lost counterculture…) “Apple turning its back on its founding libertarian ideals.” […] “With the suggestion made that high-tech libertarianism apparently leans heavily towards the puritanical.” Still Jobs did not forget some elements of the start-up culture. “Jobs wanted the department to have only one hundred people, since that was the number of names he could remember.” “Apple was able to avoid unnecessary levels of bureaucracy. We’re the biggest start-up ion the planet Jobs proudly noted in 2010.” [Pages  462-463.] About innovation, “Gladwell’s suggestion (via economists Ralf Meisenzahl and Joel Mokyr) is that it is history’s tweakers – more so even than its inventors – who truly define the age:  The visionary starts with a clean sheet of paper, and re-imagines the world. The tweaker inherits things as they are, and has to push and pull them toward some more nearly perfect solution. that is not a lesser task. [Page  474] And as a near final quote from Norman Mailer again “One is a rebel or one conforms, one is a frontiersman in the Wild West  of American night life, or else a Square cell, trapped in the totalitarian tissues of American society, doomed willy-nilly to conform if one is to succeed.”  “It is for this reason that musicians like Jim Morrison and Jimi Hendrix who passed away at the age of twenty-seven, will forever be seen as young, idealistic rebels.” “The sheer scale of the current Apple makes it difficult to consider it any kind of rebel.”  [Page  502]  “Despite being declared moribund 59 times since 1995” [Page  495] , Apple is a formidable capitalist story as the next graph shows.

As a conclusion, let me quote Jobs again, and I discovered this on the Wikipedia page for Think Different:
“When you grow up you tend to get told the world is the way it is and your life is just to live your life inside the world. Try not to bash into the walls too much. Try to have a nice family life, have fun, save a little money.
That’s a very limited life. Life can be much broader once you discover one simple fact, and that is – everything around you that you call life, was made up by people that were no smarter than you. And you can change it, you can influence it, you can build your own things that other people can use.
The minute that you understand that you can poke life and actually something will, you know if you push in, something will pop out the other side, that you can change it, you can mold it. That’s maybe the most important thing. It’s to shake off this erroneous notion that life is there and you’re just gonna live in it, versus embrace it, change it, improve it, make your mark upon it.
I think that’s very important and however you learn that, once you learn it, you’ll want to change life and make it better, cause it’s kind of messed up, in a lot of ways. Once you learn that, you’ll never be the same again.”


(Go to youtube at http://www.youtube.com/embed/4oAB83Z1ydE if you do not see the embedded frame!)

The Tinkerings of Robert Noyce

I am reading a new book on Steve Jobs and Silicon Valley entitled The Apple Revolution. I will come back on what I think when I am finished reading it. I discovered in the first pages of this book that famous author Tom Wolfe had written in 1983 another article about Silicon Valley centered around Bob Noyce, The Tinkerings of Robert Noyce.

You probably do not remember my previous posts mentioning Noyce, and if not you may want to read them:
What is the mentor role? in August 2010.
The Man Behind the Microchip in February 2008.
It is not very surprising that Noyce, the founder of Intel, is mentioned in a book about Apple computer. Noyce was a mentor to Jobs as you may see below or by reading my post above. Don Valentine add further that Noyce and Jobs may have been the two most important personalities of Silicon Valley: “There were only two true visionaries in the history of Silicon Valley. Steve Jobs and Bob Noyce. Their vision was to build great companies…”

Wolfe’s article is great and if you do not have time to read The Man behind the Microchip, you might want to read this shorter version. let me just extract a few things:

About the culture of Silicon Valley, work, openness and …
“The new breed of the Silicon Valley lived for work. They were disciplined to the point of back spasms. They worked long hours and kept working on weekends. They became absorbed in their companies the way men once had in the palmy days of the automobile industry. In the Silicon Valley a young engineer would go to work at eight in the morning, work right through lunch, leave the plant at six-thirty or seven, drive home, play with the baby for half an hour, have dinner with his wife, get in bed with her, give her a quick toss, then get up and leave her there in the dark and work at his desk for two or three hours on “a couple things I had to bring home with me.
Or else he would leave the plant and decide, well, maybe he would drop in at the Wagon Wheel for a drink before he went home. Every year there was some place, the Wagon Wheel, Chez Yvonne, Rickey’s, the Roundhouse, where members of this esoteric fraternity, the young men and women of the semiconductor industry, would head after work to have a drink and gossip and brag and trade war stories about phase jitters, phantom circuits, bubble memories, pulse trains, bounceless contacts, burst modes, leapfrog tests, p-n junctions, sleeping-sickness modes, slow-death episodes, RAMs, NAKs, MOSes, PCMs, PROMs, PROM blowers, PROM burners, PROM blasters, and teramagnitudes, meaning multiples of a million millions. So then he wouldn’t get home until nine, and the baby was asleep, and dinner was cold, and the wife was frosted off, and he would stand there and cup his hands as if making an imaginary snowball and try to explain to her… while his mind trailed off to other matters, LSIs, VLSIs, alpha flux, de-rezzing, forward biases, parasitic signals, and that terasexy little cookie from Signetics he had met at the Wagon Wheel, who understood such things.
It was not a great way of life for marriages.”

About youth and innovation:
“The rest of the hotshots were younger. It was a business dominated by people in their twenties and thirties. In the Silicon Valley there was a phenomenon known as burnout. After five or ten years of obsessive racing for the semiconductor high stakes, five or ten years of lab work, work lunches, workaholic drinks at the Wagon Wheel, and work-battering of the wife and children, an engineer would reach his middle thirties and wake up one day; and he was finished. The game was over. It was called burnout, suggesting mental and physical exhaustion brought about by overwork. But Noyce was convinced it was something else entirely. It was…age, or age and status. In the semiconductor business, research engineering was like pitching in baseball; it was 60 percent of the game. Semiconductor research was one of those highly mathematical sciences, such as microbiology, in which, for reasons one could only guess at, the great flashes, the critical moments of inspiration, came mainly to those who were young, often to men in their twenties. The thirty-five year-old burnouts weren’t suffering from exhaustion, as Noyce saw it. They were being overwhelmed, outperformed, by the younger talent coming up behind them. It wasn’t the central nervous system that was collapsing, it was the ego.”

About status, hierarchy and success:
“And if he was extremely bright, if he seemed to have the quality known as genius, he was infinitely more likely to go into engineering in Iowa, or Illinois or Wisconsin, then anywhere in the East. Back east engineering was an unfashionable field. The east looked to Europe in matters of intellectual fashion, and in Europe the ancient aristocratic bias against manual labor lived on. Engineering was looked upon as nothing more than manual labor raised to the level of a science. There was “pure” science and there was engineering, which was merely practical. Back east engineers ranked, socially, below lawyers; doctors; army colonels; Navy captains; English, history, biology, chemistry, and physics professors; and business executives. This piece of European snobbery that said a scientist was lowering himself by going into commerce. Dissenting Protestants looked upon themselves as secular saints, men and women of God who did God’s work not as penurious monks and nuns but as successful workers in the everyday world.”

Although he was an atheist, Wolfe sees in the values of “Dissenting Protestantism” roots of the Silicon Valley culture. “Just why was it that small-town boys from the Middle West dominated the engineering frontiers? Noyce concluded it was because in a small town you became a technician, a tinker, an engineer, and an and inventor, by necessity. “In a small town,” Noyce liked to say, “when something breaks down, you don’t wait around for a new part, because it’s not coming. You make it yourself.”

Interestingly enough the Apple Revolution also mentions all these points, but in the context of the hippie counter-culture… wait for next post!

Darwinian and Lamarckian innovation – by Pascal Picq

I enjoyed reading Un paléoanthropologue dans l’entreprise, i.e. a paleoanthropologist in the corporate world, the last book of Pascal Picq, a paleoanthropologist who explores the world of innovation. He applies his knowledge of evolution to compare two types of innovation: by simplifying, Continental Europe, rather Lamarckian and the Anglo-Saxon world and especially the United States, of Darwinian type.

I warn the reader by quoting Picq’s conclusion (page 236): “the Darwinian corporation has nothing to do with all the stupid stereotypes erroneously expressed about evolution. It is a corporation that adapts to changes by mobilizing innovation mechanisms, which are based on the torque variation / selection ”

From the very beginning, we dive into the heart of the matter: “The public officials who are working to open up our French vertical society will see, in the opposition between Lamarck and Darwin, the ineffectiveness of competent organizations facing the fruitful “bricolage” (do-it-yourself) of the networks which create new sources of innovation and development.” And he adds: “Diversity is a prerequisite for innovation.” (Page 12)

Picq explains (page 44): “Natural selection works in two steps, the production of variations – ithat is variability – and, secondly, the selection. It is the Darwinian algorithm.” There is neither chance nor necessity. At each stage of evolution, innovations appear as random variations constrained by history. That’s the game of possibilities.

He is well aware that the use of biology to economics analogies is dangerous (page 51): “the concepts of corporations and species are not defined easily.” And the analogy of evolution has probably its limits. “But there’s an important message: variability” (page 52) “If the environment is favorable, there is no selection. If there is competition for resources, then it manifests itself by playing variations. Adaptation comes from this mechanism.” There is no perfect Adaptation, but (page 55) “isolationism is the penultimate step before extinction.” I can not help thinking of the work of Saxenian who has shown that the more closed culture of the Boston area partly explains its lag behind Silicon Valley and the demise of Digital Equipment (DEC).

“There is no perfect adaptation; even if we create the best products, the success or failure depends on many other contextual and contingent factors. The ways of coping are not impenetrable, but take paths and sometimes difficult to predict detours: crafts, breakthrough innovations, and also the return of products once thought obsolete which find new niches. There would be a solution, that of a planned model of needs and uses. Except that between Thomas Edison and Steve Jobs, no major innovation came out of directed economic systems. On the other hand, do we fit in an existing market or do we create new markets? For structural and historical reasons – i.e. cultural – the best European companies are excellent in markets already structured but have difficulty inventing new markets such as U.S. companies.” (Page 84). Earlier, he wrote: “The dominant idea of ​​a technological change that is linear and accumulative obscures a much neglected field of innovation: history.” (Page 63)

“If a new market emerges, everyone has a chance. The absence of pressure from competition and selection admits all possibilities, giving the false impression that one is great. But when the market is saturated or shrinks, this is where selection has a role. This was the case with mobile phones in the mid-1990s. A company like Nokia, historically out of the field of electronics, was able to find its place. In today’s highly competitive market, it would be simply impossible.” (Page 87)

I let the reader discover the concepts of preadaptation, transaptation, exaptation. Picq also describes the K and r strategies which I quote from wikipedia:
– The r-selection: In unstable or unpredictable environments, r-selection predominates as the ability to reproduce quickly is crucial. There is little advantage in adaptations that permit successful competition with other organisms, because the environment is likely to change again. Traits that are thought to be characteristic of r-selection include: high fecundity, small body size, early maturity onset, short generation time, and the ability to disperse offspring widely.
– The K-selection: In stable or predictable environments, K-selection predominates as the ability to compete successfully for limited resources is crucial and populations of K-selected organisms typically are very constant and close to the maximum that the environment can bear (unlike r-selected populations, where population sizes can change much more rapidly). Traits that are thought to be characteristic of K-selection include: large body size, long life expectancy, and the production of fewer offspring, which require extensive parental care until they mature. Organisms whose life history is subject to K-selection are often referred to as K-strategists or K-selected. Organisms with K-selected traits include large organisms such as elephants, trees, humans and whales, but also smaller, long-lived organisms such as Arctic Terns.

Here we are in the heart of the matter:
– Lamarckian innovation (page 158) is active. It responds to a solicitation of the environment and tend to the improvement. “The function creates the organ.”… “Inventions are the daughters of necessity.” It works to improve products in established industries: automotive, aerospace, rail, space, telephone, water, construction, petrochemicals …
– Darwinian innovation (page 160), initially produces diversity without thinking of the advantages or disadvantages of what emerges, then in a second step, there is the action of selection. In such a context, you have to waste time, set the conditions for the production of ideas. It allows serendipity.

These are the 20% free time at Google. He also explains (page 98) the dangers of rationalizing research expenditures (see my post on the need for wasting ideas). Then (on page 103) “Steve Jobs launched Next, without much success, in a culture of the trial and error; it allowed him to propose and test new ideas that led him to come back to Apple – which would have been inconceivable in Europe.”

And here’s his summary (page 139):

Lamarckian Culture Darwinian Culture
Continental Europe USA
Hierarchy of Schools Diversity in excellence
“I did Polytechnique” “I created a business”
Uniformity of elites Diversity of elites
Large Corporations “Small Business Act”
Culture of Engineering Culture of Research
“Agrégés” (teaching) PhD (research)
Culture of Compliance Culture trial and error
Managed innovation Darwinian algorithm
Selection on IQ Selection on creativity
Applied R&D R&D by emergence
Colbertism Freedom of territories
Career Entrepreneurship
CAC40 Top25

I could have added his distinction (page 222) between Owner/manager of a company and Entrepreneur. Another interesting anecdote: “If you look at the French CAC 40, almost all have been around for half a century. Bertlesmann is the only one being less than 40 years in the European TOP25 whereas there is one third in the United States.” I mentioned this in Start-Up by citing the work of Zhang Junfu. “Zhang also analyzed this astonishing dynamics by comparing the 40 biggest high-tech Silicon Valley companies in 1982 and in 2002 as provided by Dun & Bradstreet. Twenty of the 1982 companies did not exist anymore in 2002 and twenty one of the 2002 companies had not been created in 1982.” Here it is in full:

Forty Largest Technology Companies in Silicon Valley
1982 2002
1. Hewlett-Packard 1. Hewlett-Packard
2. National Semiconductor 2. Intel
3. Intel 3. Cisco b
4. Memorex 4. Sun b
5. Varian 5. Solectron
6. Environtech a 6. Oracle
7. Ampex 7. Agilent b
8. Raychem a 8. Applied Materials
9. Amdahl a 9. Apple
10. Tymshare a 10. Seagate Technology
11. AMD 11. AMD
12. Rolm a 12. Sanmina-SCI
13. Four-Phase Systems a 13. JDS Uniphase
14. Cooper Lab a 14. 3Com
15. Intersil 15. LSI Logic
16. SRI International 16. Maxtor b
17. Spectra-Physics 17. National Semiconductor
18. American Microsystems a 18. KLA Tencor
19. Watkins-Johnson a 19. Atmel b
20. Qume a 20. SGI
21. Measurex a 21. Bell Microproducts b
22. Tandem a 22. Siebel b
23. Plantronic a 23. Xilinx b
24. Monolithic 24. Maxim Integrated b
25. URS 25. Palm b
26. Tab Products 26. Lam Research
27. Siliconix 27. Quantum
28. Dysan a 28. Altera b
29. Racal-Vadic a 29. Electronic Arts b
30. Triad Systems a 30. Cypress Semiconductor b
31. Xidex a 31. Cadence Design b
32. Avantek a 32. Adobe Systems b
33. Siltec a 33. Intuit b
34. Quadrex a 34. Veritas Software b
35. Coherent 35. Novellus Systems b
36. Verbatim 36. Yahoo b
37. Anderson-Jacobson a 37. Network Appliance b
38. Stanford Applied Engineering 38. Integrated Device
39. Acurex a 39. Linear Technology
40. Finnigan 40. Symantec b

NOTES: This table was compiled using 1982 and 2002 Dun & Bradstreet (D&B) Business Rankings data. Companies are ranked by sales.
a – No longer existed by 2002.
b – Did not exist before 1982.

In conclusion, Europe is characterized by a very Lamarckian entrepreneurial culture, promoting and supporting the established sectors, very much organized and structured for businesses, schools, unions, governments, banks, etc.. It excels in active innovation for engineers, in highly technical fields with great success in structured markets. Obviously, (page 164) “there is a real difficulty, which is the transfer of innovation in the entrepreneurial phase.” It means to (page 168) “take risks, foster a culture of trial / error” and not to penalize failure. “There is an urgent need to develop an entrepreneurial culture at all levels of our society: schools, colleges and universities, of course, but also in business and society in general.”

This is not about to be Lamarckian or Darwinian. “And remember that R&D is research and development, R for Darwin and D for Lamarck, the two steps of the Darwinian algorithm.” All the talent is in the balance between the two phases. (Page 170)

Here Picq might be wrong. Darwin and Lamarck should both be applied to the D and it may be where we have failed in Europe. We forgot Darwin needs to be in the development phase too.

Picq develops his concept of “bricolage” (page 174): “We have too long believed that the complexity of organisms depended on the number of genes.” … “In fact, the structures are simplified by successive integration during evolution (optimization) but they allow a variety of functions (plasticity).” (Page 175) “Animals and children are not Cartesian machines, we learn to walk, eat, especially for species of type K.” (Page 179) “In addition the machine Hydra which was never beaten by the best [chess] champions was beaten in 2005 by very good players – but not the great Masters – who used computers that were connected to standard sites and other players. This is Bricolage!” … “A combination of intelligent entities, but simpler and fed with external information is more effective than the best and most sophisticated machines with its programs, routines, software and internal databases.”

I could repeat here his warning on the misunderstanding of Darwinian theory that I put in the beginning. He added: “There is a grotesque conception of the war of all against all [in ecology as well as in innovation]” (page 185). “One must think competition not to eliminate, but with a strategy of coopetition.” … “This requires an open culture, with intricate collaborations.” … “Silicon Valley is the most paradigmatic model” while Sophia Antipolis is a juxtaposition of companies. “The territories and generally peripheral populations set innovations more easily and thus evolve more rapidly.” And again (page 236) “To be Darwinian does not mean to eliminate the other, but to exclude practices and models with deleterious effects on the economy and society as a whole. Darwinian theory has never been the law of the jungle, or the selfish individualism, or the war of all against all. Life is not a Rousseau-like world, but we live much less in the world of Hobbes. ”

One last anecdote: “In the early 1980s, IBM had been reluctant to enter the market of the computer. Big Blue has followed a K-strategy with great expertise on large computer systems. Then the management decided to “isolate” a small group of very creative engineers, without the constraints of the usual processes. This led to the IBM-PC, a perfect example of rapid innovation by genetic drift in a population of small size and placed in the periphery.” This is exactly the illustration of the Innovator’s Dilemma theory from Clayton Christensen.

I’ll let you read his conclusion on why humankind went to Australia. And I have not taken the time to talk about his description of gazelles, antelopes, buffaloes and other elephants, or his defense of a Small Business Act for France (or Europe). Picq might be criticized for inaccuracies, misstatements, a little fast and simple description of a complex situation, but it would be wrong to stop at this, because this is a book extremely stimulating not to say enthusiastic.