Letters Remain

  • Apple, Disney and Pixar: It’s the Products

    Written in early 2006 shortly after Disney’s acquisition of Pixar in a $7.4 billion all-stock deal, BusinessWeek looks at the relationship between the Disney and Apple CEOs and where their relationship may lead.

    Prescient in that it accurately predicted the Apple TV and the iPhone, the article also briefly looks at Jobs and his product-first mindset:

    “The great thing about Steve is that he knows that great business comes from great product,” says Peter Schneider, the former chairman of Disney’s studio. “First you have to get the product right, whether it’s the iPod or an animated movie.” […]

    Time and again since, Apple has eschewed calls to boost market share by making lower-end products or expanding into adjacent markets where the company wouldn’t be the leader. “I’m as proud of what we don’t do as I am of what we do,” Jobs often says. […] “Quality is more important than quantity, and in the end, it’s a better financial decision anyway.”

    via @venturehacks

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    Lloyd Morgan

  • Barriers, Not Calories, Influence Eating Habits

    Informing consumers of the calorific value of their food options doesn’t change their ordering/eating habits (previously), but removing barriers and making the healthier options easy to order does.

    That’s the conclusion from Kevin Volpp’s lecture, ‘Using Behavioral Economics to Improve Health Behaviors’.

    Recent studies […] have indicated that providing nutritional information at restaurants and recommending a calorie intake have shown to be ineffective at reducing consumption. However, incentivizing convenience of ordering low calorie food, by clustering these options together at the top of the menu, seems to have a significant impact. This indicates that traditional measures of informational provision are not always sufficient to motivate changes in unhealthy behavior.

    And on removing seemingly inconsequential barriers to action:

    One cafeteria tested [how much effort people will go to to eat ice cream] by leaving the lid of an ice cream cooler closed on some days and open on other days.

    The ice cream cooler was in the exact same location, and people could always see the ice cream.  All that varied was whether they had to go through the effort of opening the lid in order to get it.  Even that was too much work for many people.  If the lid was closed, only 14% of the diners decided it was worth the modest effort to open it.  If the lid was open, 30% decided it was ice cream time.

    Barriers and incentives are more powerful than good intentions. Kevin Volpp’s three big questions:

    • Are there built-in default benefits to be had?
    • In what ways can we make information provision more precise?
    • How can we shape incentives to get people to behave in a [desired] manner?

    via Nudge (1, 2)

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    Lloyd Morgan

  • The Psychology of Restaurant Menus

    Type, colour, currency symbols and vivid adjectives: all items to pay attention to when designing menus–but not for aesthetic reasons.

    Subtle changes to menus can influence our restaurant decision-making, as is made obvious by Sarah Kershaw’s excellent article on the psychology of restaurant menus.

    (If you’ve read the articles in my previous post on this topic there is little new information in this piece, but it is worth reading for the few tasty morsels that are new.)

    Some restaurants use what researchers call decoys. For example, they may place a really expensive item at the top of the menu, so that other dishes look more reasonably priced; research shows that diners tend to order neither the most nor least expensive items, drifting toward the middle. Or restaurants might play up a profitable dish by using more appetizing adjectives and placing it next to a less profitable dish with less description so the contrast entices the diner to order the profitable dish. […] Dr. Wansink said that vivid adjectives can not only sway a customer’s choice but can also leave them more satisfied at the end of the meal than if they had eaten the same item without the descriptive labeling.

    via @mocost

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    Lloyd Morgan

  • The Optimal Level of Trust

    How much we trust people influences much more than just our interpersonal relationships and can even cost us a considerable amount of financial harm.

    The study concluding this (pdf) suggests that too much or too little trust has a financial cost equivalent to that of not attending university and shows that if we trust too much we assume too much social risk, but trust too little and we give up potentially profitable opportunities:

    Highly trustworthy individuals think others are like them and tend to form beliefs that are too optimistic, causing them to assume too much social risk, to be cheated more often and ultimately perform less well than those who happen to have a trustworthiness level close to the mean of the population. On the other hand, the low-trustworthiness types form beliefs that are too conservative and thereby avoid being cheated, but give up profitable opportunities too often and, consequently, under-perform. Our estimates imply that the cost of either excessive or too little trust is comparable to the income lost by foregoing college. Furthermore, we find that people who trust more are cheated more often by banks as well as when purchasing goods second hand, when relying on the services of a plumber or a mechanic and when buying food.

    via Tim Harford

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    Lloyd Morgan

  • Entrepreneurial Success Not Correlated to University Prestige

    An analysis of the educational backgrounds of tech company founders has shown that an elite education  does not provide as much of an advantage as many expect. In fact the results seem to show that where one studies has no correlation to entrepreneurial success, as long as one actually does study.

    The 628 U.S.-born tech founders [surveyed] received their education from 287 unique universities. Almost every major U.S. university was represented. The top ten institutions in this group accounted for only 19 percent of the entire sample. In other words, 81% of the tech company founders came from “regular” schools. […]

    The average sales revenue of all startups in one of our samples was around $5.7 million, and these companies employed an average of forty-two workers. Startups established by tech founders with Ivy League degrees had average sales and employment of $6.7 million and fifty-five workers, respectively. The success of these two groups markedly contrasted with startups established by tech founders with only a high school degree. Those founders had average revenues and employees of $2.2 million and eighteen, respectively. […] In other words, it didn’t matter so much if you graduated from an Ivy. What made the greatest difference was having a higher degree.

    Similar results were uncovered in an analysis of company founders from India and China.

    The analysis also challenges the belief that entrepreneurs start their ventures fresh out of full-time education, with the following results shown for how long after graduation different graduates found their companies:

    • MBA graduates: 13-15 years
    • Computer Science/IT graduates:  13 years
    • Bachelor’s degree holders: 17 years
    • Applied science majors: 20 years
    • PhD holders: 21 years

    The crux of the argument: “The Ivy-Leaguers may be able to get their buddies from [big-name VC firms] to return emails, but they aren’t going to be any more successful at building companies.”

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    Lloyd Morgan

  • Business Schools Failing American Manufacturing

    America’s deterioration as a leader in the engineering and manufacturing fields can be attributed largely to the failings of the elite business schools, suggests Noam Scheiber, Rhodes Scholar and senior editor at The New Republic.

    Business school graduates are now educated toward high paid financial services jobs, leading gradually to an “era of management by the numbers”. Executives are now more adept at buying and selling assets than running industrial companies, and this preoccupation with ROR has resulted in “a [reluctance] to invest heavily in the development of new manufacturing processes”.

    Since 1965, the percentage of graduates of highly-ranked business schools who go into consulting and financial services has doubled, from about one-third to about two-thirds. And while some of these consultants and financiers end up in the manufacturing sector, in some respects that’s the problem. Harvard business professor Rakesh Khurana, with whom I discussed these questions at length, observes that most of GM’s top executives in recent decades hailed from a finance rather than an operations background. […] These executives were frequently numb to the sorts of innovations that enable high-quality production at low cost.

    […] In their landmark Harvard Business Review article from 1980, “Managing Our Way to Economic Decline,” Robert Hayes and William Abernathy pointed out that the conglomerate structure forced managers to think of their firms as a collection of financial assets, where the goal was to allocate capital efficiently, rather than as makers of specific products, where the goal was to maximize quality and long-term market share.

    via Arts and Letters Daily

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    Lloyd Morgan

  • Language Map of Europe

    As Neatorama says of this language map of Europe:

    Languages correspond only imprecisely with political borders, which are designated by the superimposed red lines.

    The English version of this map was created by Postmann Michael in 2007 […] and there are continuing doubts regarding the accuracy of some of the language borders.

    I am reminded of this equally wonderful graphic depicting the evolution of the Indo-European family of languages.

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    Lloyd Morgan

  • Flags as Language Symbols in Web Design: Wrong

    With Brazil (Portuguese), Finland (Swedish) and my home-country (the United Kingdom) as perfect examples, Jukka Korpela tells us why the use of flags to represent language options on the web is “plain wrong”.

    In a perfect world, there would be no need for explicit links to versions of a document in different languages. Even in this imperfect world, the Web might evolve so that a server and a user agent smoothly select a version according to language preferences which the user has given when configuring the browser. (There are methods for such negotation in the HTTP protocol, but they are rarely used in practice so far. […] This should not be confused with the misguided “forced redirection” e.g. by Google, which uses undisclosed heuristics to send the user to a page in a particular language.)

    After the compelling arguments are presented, Korpela recommends complying with the recommendations from the European Committee for Standardization:

    • The name of the language in the language itself.
    • The codes defined in the international standard ISO 639, either the two-letter codes of ISO 639-1 (list), such as en for English, or the three-letter codes of ISO 639-2 (list), like eng for English.

    via Quixotic Quisling

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    Lloyd Morgan

  • The Humble, Essential and Safe Elevator

    Stuck in an express elevator around the 13th floor of the McGraw-Hill office in New York for 41 hours, Nicholas White’s story should be somewhat fear-provoking.

    Intersperse with information on the importance of elevators in modern cities, a profile of elevator consultant James Fortune and a discussion on the psychology of elevators, the article somehow becomes reassuring instead.

    Two things make tall buildings possible: the steel frame and the safety elevator. The elevator […] is to the city what paper is to reading and gunpowder is to war. Without the elevator, there would be no verticality, no density, and, without these, none of the urban advantages of energy efficiency, economic productivity, and cultural ferment. […] And the elevator is energy-efficient—the counterweight does a great deal of the work, and the new systems these days regenerate electricity. The elevator is a hybrid, by design.

    This quote from a spokesman for elevator company Otis:

    We’ll wait ten to fifteen minutes for a train, without complaining, […] but wait thirty seconds for an elevator and the world’s coming to an end. Which means, really, that we’ve done a good job. We deliver short waits. But why are we held to a different standard?

    and the various discussions on the psychology of elevator spacing brings to mind this quote from Re-creating the Corporation by the recently deceased organisational theorist, Russell Ackoff:

    There is a classic case in which the tenants of a large office building complained about the increasingly poor elevator service. A consulting firm specializing in elevator-related problems was employed to deal with the situation. It first established that average waiting time for elevators was too long. It then evaluated the possibilities of adding elevators, replacing existing elevators with faster ones, and introducing computer controls to improve utilization of elevators. For various reasons, none of these turned out to be satisfactory. The engineers declared the problem to be unsolvable.

    When exposed to the problem, a young psychologist employed in the building’s personnel department made a simple suggestion that dissolved the problem. Unlike the engineers who saw the service as too slow, he saw the problem as one deriving from the boredom of those waiting for an elevator. So he decided they should be given something to do. He suggested putting mirrors in the elevator lobbies to occupy those waiting by enabling them to look at themselves and others without appearing to do so. The mirrors were put up and complaints stopped. In fact, some of the previously complaining tenants congratulated management on improvement of the elevator service.

    via Kottke

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    Lloyd Morgan

  • We Project Our Beliefs Onto God

    Those with a belief in God subconsciously bestow him with their own opinions in order to “validate and justify” them. This is a theory that has recently been strengthened by two surprisingly simple yet effective experiments conducted to find what the theist think about the beliefs of God, other people and themselves when it comes to controversial issues.

    The researchers started by asking volunteers who said they believe in God to give their own views on controversial topics, such as abortion and the death penalty. They also asked what the volunteers thought were the views of God, average Americans and public figures such as Bill Gates. Volunteers’ own beliefs corresponded most strongly with those they attributed to God.

    Next, the team asked another group of volunteers to undertake tasks designed to soften their existing views, such as preparing speeches on the death penalty in which they had to take the opposite view to their own. They found that this led to shifts in the beliefs attributed to God, but not in those attributed to other people.

    Given that many use their deity of choice as a moral compass, the researchers suggest that “inferences about God’s beliefs may […] point people further in whatever direction they are already facing” (i.e. strengthen their already possibly controversial view on a subject).

    The second experiment:

    fMRI [was used] to scan the brains of volunteers while they contemplated the beliefs of themselves, God or “average Americans”. […]

    In the first two cases, similar parts of the brain were active. When asked to contemplate other Americans’ beliefs, however, an area of the brain used for inferring other people’s mental states was active. This implies that people map God’s beliefs onto their own.

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    Lloyd Morgan