Stanford CSP BUS 74, Session 2 Quiz 2

Background
Mood plays an important role in motivating people for a broad range of everyday activities, both useful and harmful. In a recent study, Stanford researchers discovered a mood-related trade-off between people's short-term and long-term goals:

We tracked the activities and moods of over 28,000 people in real time and demonstrated that people seek mood-enhancing activities when they feel bad and unpleasant activities when they feel good. These findings clarify how emotions shape behavior and may explain how humans trade off short-term happiness for long-term welfare. Overcoming such trade-offs might be critical for our personal well-being and our survival as a species.

Quiz
Read the study (at least the abstract and intro) to understand the trade-off.

1. Use your imagination to propose 2-3 ways to break the trade-off in order to become happier and more productive in your personal and professional life.

2. Assume that the trade-off is broken by a new, yet to be developed technology. Name 2-3 industries and/or businesses that would benefit the most from the breakthrough.

Stanford CSP BUS 74, Session 2 Quiz 1

Background:
Founded in 1943, IKEA grew from a small mail-order shop to a major global manufacturing and retail business. Flat-pack easy-to-assemble furniture turned out to be the key innovation that powered the company. For example, the Billy bookcase, originally designed in 1979, sold over 50 million units and is still in production at the rate of 15 units per minute.

Quiz:
Listen to a BBC podcast (9 min) about the Billy Bookcase and read the article about its inventor Gillis Lungren. Using different perspectives, e.g. consumer, retailer, manufacturer, list at least 3 trade-offs that the company broke on its way to global success.

Invention of the Day: Thinking Inside the Box

When we participate in invention workshops and other creative activities, as I often do, we hear the moderator urge us to think "outside the box." Most often, though, nobody knows where the box is. As a result, we often get from one box into another, which is even worse than the first one.

Despite common "creative" wisdom, thinking inside the box can be extremely productive. One of the great inventions in economics of the 19th century was the Edgeworth Box, named after Francis Ysidro Edgeworth (1845 – 1926). While trying to figure out an efficient allocation of limited resources between two people, Edgeworth decided to represent their positions graphically inside a two-dimensional box.

For example, in a simplified model the patent war between Apple and Google can be described as a fight for a position inside the box (Figure 1). At the given moment, the number of patents is fixed, the amount of money at stake is also fixed. Outcome 1 (p1, m1) shows the initial position where Apple has more patents, but less money. Since the number of patents and money is fixed, Google is positioned in exactly the same spot, at the Outcome 1 dot. From Apple's perspective, the purpose of the war is to move the situation from O1 to Outcome 2 (p1, m1), where some of Google's money goes to Apple in exchange for patents. As a result, Apple will have more money, and fewer patents.

The Edgeworth box is extremely useful for analyzing allocations of fixed resources. It is essential to modern finance and economics when it comes to understanding and explaining equilibrium states. (See for example, Financial Theory course from Yale. Econ 251).

For an inventor, it is critical to know where the box is before starting to think "outside the box." Our goal would to discover a dimension where the trade-off inside Edgeworth Box becomes irrelevant.

tags: creativity, trade-off, tradeoff, economics, invention, innovation

Invention of the Day: Anaesthesia.

October 16, 1846 is the official birthday of anaesthesia, the art of preventing a surgery patient from feeling pain. On that day, surgeon Dr. Warren publicly demonstrated a painless tumor removal at the operating theater of the Massachusetts General Hospital. To anaesthetise the patient, Dr. Warren used the method invented by dentist William T.G. Morton. Under the invention, the patient was rendered unconscious by inhaling ether, an organic compound known to people since the 8th century, but never used in medicine before. The invention of practical anaesthesia (along with methods to prevent wound infection) created the world of modern surgery. The 1846 invention was a breakthrough that allowed people to control one of the basic biological experiences - pain.

Morton's US Patent 4,848 on the medical use of ether was never enforced due to public outcry.

Flue vaccine: a world-scale guessing game

According to the US Center for Disease Control and Prevention (CDC),

It takes at least six months to produce large quantities of influenza vaccine. For vaccine to be delivered in time for vaccination to begin in October and November, manufacturers may begin to grow one or more of the virus strains in January based on their best guess as to what strains are most likely to be included in the vaccine.

 To improve the odds of guessing the right virus 6 months ahead of time, each flue shot contains a cocktail  of three weakened viruses. The hope is that at least one of them will trigger our immune system into anticipating the right flue. In essence, we force the immune system into overdrive (red alert state!) because we can't know the exact nature of the flu threat. When the guess turns out to be wrong, as that was the case with the 2009 H1N1 virus, we end up with a pandemic situation because our collective immune system is barking up the wrong tree.

Would it be possible to make a 10X improvement in the vaccine development process, so that the cycle takes 1-2 weeks instead of 18-20 weeks?

The current system is geared toward large-scale production and distribution, which requires government approvals, massive investment into manufacturing, etc. To deliver an order-of-magnitude improvement, we need a different system that produces the vaccine on the spot, bypassing the existing methods. Using 3D printing as an analogy, if we had a vaccine production kit that could be adjusted locally instead of globally, we would be able to kill two birds with one stone: make the right vaccine at the right time AND reduce vaccination costs.

Thoughts?

tags: healthcare, tradeoff, dilemma, problem, solution

Lunch Talk: TEDx, the battle for power on the Internet.

Bruce Schneier talks about the problem of control over data on the Internet.



In chapter 22 ("Seeing the Invisible: The System behind the New Internet") of our favorite book, we discuss the mechanism of Control that Internet users delegated to private companies in return for subsidized devices and services. Essentially, the users traded their long-term digital futures for short-term economic and status gains. In economics, it is called Future Discounting. Paradoxically, the original idea that on the web everything is free AND there are no strings attached to the content turned into a familiar trade-off: "free stuff with lots of strings attached." As usual, a recipe for success became a recipe for disaster.

Trade-off of the Day: Revenue vs User Experience

Yahoo reported 2012 Q4 results that show a company stuck in a 15-year old trade-off between selling more annoying banner ads and improving user experience:

Display ad revenue excluding commissions to other websites in Q4 fell 5%, even though the amount advertisers were willing to pay for ads rose 7%, the company said in an earnings statement.

...the fall in Q4 was also at least partly an effect of Mayer's mission to improve the user experience on some Yahoo properties, including its home page, wrote Cowen and Co. analyst John Blackledge, who rates Yahoo as neutral. Fewer ad impressions in Q4 were "partially a result of an attempt to rein in site clutter and improve user experience," he said.

Yahoo's business model is bound by the Revenue vs Quality trade-off. In contrast, Google provides relevant text ads that improve user experience AND generate more revenue. The difference in business models creates a huge performance gap.

 

tags: tradeoff, business, internet, model, constraint, 

Most VC funds are no better than Russell 2000 index

The Kaufmann Foundation published an analysis of its VC investments. 65% of VC funds performed worse than their closest Public Market Equivalent (PME) - the Russell 2000 index (stock ticker - IWM)

 

(Source: GeekWire, May 7, 2012)

The blind belief in the Risk vs Reward trade-off doesn't work. By taking more risks, foundations don't generate higher long-term returns.

tags: innovation, tradeoff, problem, startup, VC, economics

Trade-off of the day: privacy vs performance

A NYT article about HTML 5, an upcoming standard for web pages, describes potential problems the standard creates for user privacy:

The new Web language and its additional features present more tracking opportunities because the technology uses a process in which large amounts of data can be collected and stored on the user’s hard drive while online. Because of that process, advertisers and others could, experts say, see weeks or even months of personal data. That could include a user’s location, time zone, photographs, text from blogs, shopping cart contents, e-mails and a history of the Web pages visited.

It is remarkable how tradeoff-based, standard, non-creative, non-inventive thinking builds privacy problems right into a major technology standard for the next 10-15 years. Engineers are educated and brought up with the idea that an improvement in one area has to lead to a deterioration in another. It's not entirely their own fault because they are trained to work and think within certain constraints. But even when they do have a chance to create a new technology from scratch, their psychological inertia guides them toward preserving bad old compromises, or, as in this case, making them worse than the old ones for the sake of "balance"!

...software developers and the representatives of the World Wide Web argue that as technology advances, consumers have to balance its speed and features against their ability to control their privacy.

WTF is balance?!

tags: psychology, inertia, tradeoff, problem, book, creativity, internet, security

Trade-off of the day: Innovation vs Copying

A 2009 paper in the Journal of Theoretical Biology contrasts a-social (independent) and social (imitation, emulation, etc) learning:

Asocial learners (information producers) typically incur additional temporal or energetic costs as well as risk of mortality or injury associated with learning from direct interaction with the environment. While social learners (information scroungers) can acquire information relatively cheaply (i.e. they are free-riders), they are more liable than asocial learners to acquire outdated information that has no associated fitness benefit in a changing environment.

Two important consequences: a) copy-cat behavior is evolutionary successful and, therefore, should be rampant in a population; b) innovators are always at a disadvantage, unless they can preserve informational "distance" between themselves and the copy-cats.

Since the majority of the population consists of copy-cats, it benefits the society as a whole to distribute new useful information as fast as possible. On the other hand, if innovators cannot use the information to their own advantage, eventually, all innovation stops.
In many ways, human history is a series of continuous attempts to break through the trade-off. Today, we've got patent systems to, more or less, protect inventions; we've got Nobel Prizes and celebrity awards to encourage people share their ideas; we've got the open source movement where people earn reputations in exchange for their code contributions; etc. Most likely, social networking will create completely new incentives for sharing ideas and exploiting human propensity for social learning.

References:
1. doi:10.1016/j.jtbi.2009.05.029 Kendal J. et al., 2009. The evolution of social learning rules: Payoff-biased and frequency-dependent biased transmission. Journal of Theoretical Biology Volume 260, Issue 2, 21 September 2009, Pages 210-219


2. DOI: 10.1126/science.1184719 Rendell L, et al. 2010. Why Copy Others? Insights from the Social Learning Strategies Tournament. Science 9 April 2010: Vol. 328. no. 5975, pp. 208 - 213.

tags: innovation, invention, problem, solution, tradeoff, dilemma, information, evolution, games, learning, education, market

Toward a personal brand

Just wanted to capture a thought that today's social networking infrastructure provides
1. a platform for personal branding based on reputation;
2. a marketplace for digital goods.

Therefore, we should expect emergence of completely new kinds of commerce, including money, development tools, transaction mechanisms, and etc.

Background reading:
Gallup: "The Value of Personal Branding. July 23, 2009.

Science Magazine: Markets, Religion, Community Size, and the Evolution of Fairness and Punishment. Science 19 March 2010: Vol. 327. no. 5972, pp. 1480 - 1484 DOI: 10.1126/science.1182238


tags:  10x, tradeoff, problem, solution, social, information, money, market, niche construction, infrastructure, payload

From John R. Searle's "Rationality in Action":

...most practical reasoning is about adjudicating between conflicting, inconsistent desires and other sorts of reason...Typically in practical reasoning you have to figure out how to give up on satisfying some desires in order to satisfy others... By satisfying one desire your frustrate others.

Ch.1, p.30.

This is where practical (engineering, economics, business, etc.) reasoning differs from inventive reasoning. One of the core principle of the TRIZ tradition is commitment to Ideal Solution, i.e. a solution that enables us to satisfy one desire without frustrating others. As inventors and innovators, we should be looking for situations where widely accepted trade-offs between conflicting desires become more and more lopsided, e.g. due to new technology developments.

For example, today practically all printed content (books, magazines, newspapers, scientific articles, etc) is produced digitally but distributed "paperly." This tells us that the previous conflict between the two forms of content, digital vs paper, was adjudicated toward the old publishing world. That is, publishers benefited enormously by optimizing the process of content creation to fit their physical goods distribution model. When you go through any airport you see that books and magazines are sold side by side with salted peanuts and souvenir mugs. Even Amazon's Kindle, an all-digital device, is no more than a glorified paperback because its reading content was originally developed to be printed on paper. Paradoxically, this new device and distribution technology proliferate an old trade-off.

Looks like an opportunity for a good invention.

tags: tradeoff, payload, system, evolution, invention, innovation, tool, source, problem

Trade-off of the day: security vs convenies

...if you want to take a significant step in keeping prying eyes away from your electronic correspondence, one good encryption technology that predates Google altogether is worth looking at. It's called public key encryption, and I'm sharing some instructions on how to get it working if you want try it.

Unfortunately, better security typically goes hand in hand with increased inconvenience. (CNet)

Can be relatively easy to implement on a server-hosted e-mail system like Google Wave. People would get their encryption keys when they sign up for the service, or join a company that uses Wave as its main e-communications tool.

tags: security, information, tradeoff, problem, solution, google, control, payload

A 10X change in military surveilance technology

NYT points to an ongoing revolution of command and control architecture in the modern warfare:

Air Force drones collected nearly three times as much video over Afghanistan and Iraq last year as in 2007 — about 24 years’ worth if watched continuously. That volume is expected to multiply in the coming years as drones are added to the fleet and as some start using multiple cameras to shoot in many directions.

Instead of carrying just one camera, the Reaper drones, which are newer and larger than the Predators, will soon be able to record video in 10 directions at once. By 2011, that will increase to 30 directions with plans for as many as 65 after that. Even the Air Force’s top intelligence official, Lt. Gen. David A. Deptula, says it could soon be “swimming in sensors and drowning in data.”

The data overload problem is obvious and the military is trying to solve it the traditional way, by adding more bodies, specifically, 2,500 analysts, to watch and analyze video feeds. Since in real life attacks don't happen continuously, these highly trained people will be, literally, watching the grass grow most of the time.

As the result we have a dilemma: a) we want to watch drone video feeds all the time to detect important events that are unpredictable and outside of our control; b) we don't want to watch the feeds because it's a huge waste of time (nothing happens).

The next step is application of the separation principles (space, time, action) - probably, some time during the Spring '10 Principles of Invention class.

tags:10x, dilemma, problem, tradeoff, solution, military, video, , 3x3, bus74

It's the infrastructure, stupid!

In "Mind, Language, and Society" philosopher John R. Searle writes:

When confronted with an intractable question such as is presented by a clash of convincing default positions, don't accept the question lying down. Get up and go behind the question to see what assumptions lie behind the alternatives the question presents.

Trade-off of the Day: History

Just how, though, do you present historical experience for the purpose of enlarging personal experience? To include too little information can render the whole exercise irrelevant. To include too much can overload the circuits and crash the system. The historian has got to strike a balance, and that means recognizing a trade-off between literal and abstract representation.

The Landscape of History: How Historians Map the Past, by John Lewis Gaddis. p 12.

The digital TV industry is beginning to overcome the cost vs quality trade-off - a good indication of a breakthrough innovation:

the difference now is that technology is increasingly creating an environment where less money doesn't necessarily mean lower quality.

via The Hollywood Reporter.


tags::tradeoff, dilemma, evolution, detection, digital

Trade-off of the Day: quality vs costs

A good article by Jeffrey S. Flier, Harvard Medical School, in which he discusses several key problems that plague the US health care system. For example, the lack of innovation is #2 on his list:

Second, in health care as in other markets, real progress depends on innovation. Yet health care markets rarely conduct successful experiments with new ways of paying for and organizing health care delivery.

He also notices the tendency of proposed solutions to fall back into the familiar quality vs costs trade-off.

Some have offered novel approaches to “payment reform,” but none of these can realistically claim to both increase quality and reduce costs, while being acceptable to Congress.

:: tradeoff, health, greatest, problem, reverse brainstorm

Dilemma of the Day: the politics of carbon emissions.

Faced with opposition to his legislation,

"Mr. Waxman [the Chairman of the House Energy and Commerce Committee] was forced to water down the cap in early years to please rural Democrats, and then severely ratchet it up in later years to please liberal Democrats."

Henry Waxman's dilemma: the cap should be low(for rural Democrats seeking re-elections in conservative districts), and the cap should be high (for urban Democrats in liberal districts). Solution: separation in time. Very low cap now; very high cap later. A good solution to a political problem, but, due to a future carbon tax shock, a bad solution for the economy.

A better solution would be to additionally localize the caps in space, e.g. rural areas, and/or provide local subsidies to offset the initial impact. On the political side, this gives rural Democrats points for defending voter interests in their own districts; on the carbon reduction side, enables better control and coverage of CO2 emissions in the country as a whole.

BizTech Dilemma of The Day: Google vs Microsoft

== To be used as an illustration for a Dilemma-busting session (Separation Principles) ==

Background

The tandem of the Microsoft e-mail client (Outlook) and server (Exchange) has been a dominant force in corporate IT world for years. Now, Google is trying to break into this lucrative market by offering companies a competing product - Google Apps, a software-as-a-service suite of cloud applications for e-mail and information sharing. Unfortunately for Google, there's a problem:

there apparently is a sizable enough number of workers that refuse to move off Outlook, meaning that IT directors who want to sign up with Google were forced to maintain a Microsoft Exchange server to placate those folks while moving everybody else to Gmail. An alternative where Outlook users are connected to Gmail through IMAP got the job done, but at the expense of a severe performance hit, said Chris Vander Mey, a senior product manager with Google.

Dilemma formulation

Thus, we can formulate the first-level dilemma:
- on one hand, IT managers need to continue maintaining the Microsoft software, because it is familiar to their company's workers (Condition 1)
- on the other hand, IT managers need to stop maintaining the Microsoft software, because, for some of them, Google provides a more cost-effective solution (Condition 2).

By separating in space, we arrive at a configuration, where Outlook remains on the client (Condition 1), while Google Apps becomes the new server (Condition 2).

The IMAP solution moves us in the right direction, but it doesn't go far enough. The dilemma it tries to avoid can be formulated as follows:
- one one hand, the e-mail client should use the MS Exchange interface, because it provides the best performance (Condition 3);
- on the other hand, the e-mail client should not use the MS Exchange interface, because the new IT infrastructure runs GoogleApps servers (Condition 4).

In other words, the client should speak natively both "languages". The question is: When? By separating in time, we get a client that at one time speaks Exchange, and at another time speaks GoogleApps.
When does it need to speak Exchange? When it talks to Outlook user interface application. When does it need to speak GoogleApps? When it talks to a GoogleApps server.
As a result we get a solution of a plug-in that leaves Outlook unchanged, but "fakes" an Exchange interface for it.

An alternative solution would be to separate in space, i.e. have a server-side Exchange-GoogleApps translation module (e.g. a virtual implementation). Does it makes sense? Maybe for Microsoft, but not for Google. Mostly, because Google wants to, eventually, get rid of Outlook clients altogether. Also, e-mail clients that don't have Outlook, e.g. mobile devices, can sync with GoogleApps directly, and they don't need an Exchange translation module.

The end-result: a set of configurations where legacy Outlook clients (PCs) with lots of processing power and bandwidth use a plug-in, while mobile clients use native GoogleApps interfaces.

==

Notes:
Also, see Principle #24 (Intermediary) in the contradiction resolution matrix. It would be ok to apply it here right away, but it won't be specific enough to provide adequate criteria for configuration choices.

Three diagrams are needed to illustrate various problem configurations.