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Articles to Read.

Give it five minutes

A few years ago I used to be a hothead. Whenever anyone said anything, I’d think of a way to disagree. I’d push back hard if something didn’t fit my world-view.

It’s like I had to be first with an opinion – as if being first meant something. But what it really meant was that I wasn’t thinking hard enough about the problem. The faster you react, the less you think. Not always, but often. It’s easy to talk about knee jerk reactions as if they are things that only other people have. You have them too. If your neighbor isn’t immune, neither are you.

This came to a head back in 2007. I was speaking at the Business Innovation Factory conference in Providence, RI. So was Richard Saul Wurman. After my talk Richard came up to introduce himself and compliment my talk. That was very generous of him. He certainly didn’t have to do that.

And what did I do? I pushed back at him about the talk he gave. While he was making his points on stage, I was taking an inventory of the things I didn’t agree with. And when presented with an opportunity to speak with him, I quickly pushed back at some of his ideas. I must have seemed like such an asshole.

His response changed my life. It was a simple thing. He said “Man, give it five minutes.” I asked him what he meant by that? He said, it’s fine to disagree, it’s fine to push back, it’s great to have strong opinions and beliefs, but give my ideas some time to set in before you’re sure you want to argue against them. “Five minutes” represented “think”, not react. He was totally right. I came into the discussion looking to prove something, not learn something.

Richard has spent his career thinking about these problems. He’s given it 30 years. And I gave it just a few minutes. Now, certainly he can be wrong and I could be right, but it’s better to think deeply about something first before being so certain you’re right.

Plastic Pollution

Plastic pollution is having a negative impact on our oceans and wildlife health.

High-income countries generate more plastic waste per person.

However, it is the management of plastic waste that determines the risk of plastic entering the ocean. High-income countries have very effect waste management systems; mismanaged waste – and plastic that ends up in the oceans – is therefore very rare. Poor waste management across many middle- and low-income countries means that these are the main sources of global ocean plastic pollution.

An estimated 20 percent of all plastic waste in the oceans comes from marine sources. In some regions, marine sources dominate: More than half of plastics in the Great Pacific Garbage Patch (GPGP) come from fishing nets, ropes and lines.

Economic Inequality

Since the 1970s, economic inequality in the US has increased dramatically. And in particular, the rich have gotten a lot richer.

Nearly everyone who writes about economic inequality says that it should be decreased.

I'm interested in this question because I was one of the founders of a company called Y Combinator that helps people start startups. Almost by definition, if a startup succeeds, its founders become rich. Which means by helping startup founders I've been helping to increase economic inequality. If economic inequality should be decreased, I shouldn't be helping founders. No one should be.

But that doesn't sound right. What's going on here? What's going on is that while economic inequality is a single measure (or more precisely, two: variation in income, and variation in wealth), it has multiple causes. Many of these causes are bad, like tax loopholes and drug addiction. But some are good, like Larry Page and Sergey Brin starting the company you use to find things online.

If you want to understand economic inequality — and more importantly, if you actually want to fix the bad aspects of it — you have to tease apart the components. And yet the trend in nearly everything written about the subject is to do the opposite: to squash together all the aspects of economic inequality as if it were a single phenomenon.

Sometimes this is done for ideological reasons. Sometimes it's because the writer only has very high-level data and so draws conclusions from that, like the proverbial drunk who looks for his keys under the lamppost, instead of where he dropped them, because the light is better there. Sometimes it's because the writer doesn't understand critical aspects of inequality, like the role of technology in wealth creation. Much of the time, perhaps most of the time, writing about economic inequality combines all three.

The Incredibly Happy Life of Larry David, TV's Favorite Grouch

The kid is wearing a T-shirt reading “EAT MORE AVOCADO,” one of the designs for sale at this Venice Beach café at which he's a server, along with “WE SELL DESIGNER KALE” and “BEET IT.” He's waiting on me and Larry David, who is of course dressed precisely like Larry David—gray knit hoodie, dark long-sleeve T-shirt with a white shirt beneath that, beige jeans, and sneakers. David chooses or approves all the wardrobe for Curb Your Enthusiasm, and then he keeps all the clothes, from blazers to socks, creating a seamless visual loop between Larry and the character he calls TV Larry.

So Larry David is sitting there, using his very Larry David voice to discuss very Larry David things: breakfast preferences (today, scrambled egg whites, grilled onions, and sliced avocado), the relative pleasures of killing flies and ants (flies are more satisfying), and yes, clothes, about which, unsurprisingly, David has Thoughts. The son of a garment-district salesman, David has always approached clothing with something of a tailor's eye. The very first Seinfeld gag was about shirt-button placement; the first Curb Your Enthusiasm centered on a crotch cut too big, thus simulating an erection. He has a code: One should wear only one “nice” piece of clothing at a time. “Otherwise it's too much,” he says. “Too dressed. You have to be half-dressed. That's my fashion theory, since you asked: Half Is More.”

The Investing Meta-Game

Two variables determine successful bets. First, you must have some foresight in the future through betting on the right horses: this is an “investment process”. Second, you must also identify where the odds, implied by prices, are different than your view of the future. For example, a bet on Sea Biscuit in the 1938 Kentucky Derby merely identifies what the crowd already knows, and prices reflect such. The stock market is similar: investors bet on future company profitability relative to stock valuations (price-earnings ratio, for instance). Most investors understand this.

There’s one more important point. Imagine you have an “investment process”, in this case you collect statistical data on past horse races to forecast the future. You address your behavioral biases. You have “long-term capital”, which means you’re betting with your own money. Yet, after years of betting, your results are statistically no better than average.

At this point, the poor bettor probably reflects on his results, revisits his “process” and sees no obvious reason for his underperformance besides the fact that maybe luck runs in streaks and his approach is “out of favor”. He’s missed an important point, its not the sophistication of his process that matters, it’s the quality of his process relative to the pool of competitors -- and likely his pool of competitors has changed. Thus, it may not matter that your team does pre-mortem reviews, red-team / blue-team, checklists, or any of the like, as the incremental quality of decision-making does not overcome a very real problem: most of your competitors are doing it too.

My Personal Moonshot

Rather than talk about moonshots we might take collectively, let me go small scale and lay out the "moonshot" I have tried to take with my own career. My goal is to be the economist who has most successfully used the internet as a platform to foment broad enlightenment.

As I see it, the internet is changing everything, and most intellectuals (and also businesspeople) still are underestimating the import of this reality. That's bad for me as a consumer, but it gives me an edge as a producer, namely the competition is limited. This advantage is heightened by the fact that academia does not reward internet communication per se.

What the Death of iTunes Says About Our Digital Habits

When iTunes launched in January 2001, Apple’s software was a place to organize the MP3s and other music files on your desktop computer. (It was not yet even a tool to sync an iPod, because the first iPod didn’t come out until October 2001.) But within a few years, it became a “digital hub,” a place to organize your music and movies and, eventually, iPhone, which debuted in 2007. (Note for younger readers: An iPod was like an iPhone, except it could not make phone calls, or search the internet, or sext, and the sexts would have been terrible, because it had a black-and-white screen.) But iTunes kept guzzling other functions: digital movies, TV shows, and then apps.

The abandonment of iTunes heralded a broader shift in how Americans are assumed to approach their digital lives. You could call it the victory of Gmail. When it debuted in 2004, Google’s email software offered Americans a revolutionary new way of thinking about their digital footprint: Don’t. Instead of encouraging people to file their email into folders or delete it—which is how you have to deal with paper mail—it encouraged an approach that, anywhere else, would be called hoarding. “With tons of storage space, you’ll never need to delete an email,” said a recent Gmail tutorial. “Just keep everything and easily find it later.”

More to Check Out: 
You have 20 minutes left to live. What do you do?
- How to Identify an Immoral Maze
- Life at the End of American Empire
Visa, Plaid, Networks, and Jobs
- How Elite Chess Players Can Burn More Than 6,000 Calories Sitting Down



Books I read:

  • The Three-Body Problem

My bookshelf

My Update:

  • Working. The team is growing. Really excited!

  • Friend and I wrote a guide to help people quit consulting/banking and break into startups. Hit reply to this email if you want to read a draft!

If you enjoy the newsletter, you can Venmo me a tip: @jordangonen or on the web here. Really appreciate the support! - Jordan