"This is to inform you that I have already obtained all the investment funds that I need to launch my project. I thank you for doing all you have done for me. I am thrilled beyond measure. Apparently I have a better idea than even I knew."
Posted on August 15, 2017 @ 04:44:00 AM by Paul Meagher
In David Perkin's book Making Learning Whole (2009) he has a chapter called "Working on the Hard Parts" in which he stresses the importance of mastering difficult skills and knowledge in order to get to the next level of performance. One of the exercises he has his students (teachers-in-training) do is to devise a Theory of Difficulty (TOD) for a given domain of skill/knowledge. The TOD is supposed to help these teachers-in-training to come up with a better curriculum for learning that skill/knowledge.
It may be useful to think about the TOD associated with successfully starting a particular line of business.
Imagine that instead of you starting your business, you have to teach someone else about how to start your business. Your TOD might
start with these two questions:
What makes starting my particular line of business difficult?
What would the person have to learn in order to overcome those difficulties and be successful?
If I am starting a bike rental business the difficulties I would face in doing so are different than if I am starting a software development company. There are different things I have to be good at and master. A TOD for starting a business can't really be specified in abstract terms. David Perkins is critical of TODs that are overly general and often gives his students this feedback:
Please think about this some more and give us a theory of difficulty that is more specific to your topic. Give us one that doesn't sound like something that could be said for a hundred other topics. There are alot of topics that are complicated or commonly boring or initially unfamiliar or packed with points to remember. Please get specific! You see, theories of difficulty afford much more leverage if they target the particular learning challenges for that particular thing.
It is arguably much easier to come up with a TOD when there is established knowledge for the domain. In the case of starting up a
particular line of business in a particular place, there may be no rulebook unless you are starting a franchise that provides ample guidance on these matters. Your TOD is subject to revision as you learn more about how to succeed in your particular line of business. You may learn, for example, that alot of your bike rental clients are coming from tourist accommodation owners advising tourists on what they can do. Now your marketing approach needs to change to target these accommodation owners. The particulars of what makes marketing your business challenging has changed.
When an entrepreneur starts a business they probably already have an implicit TOD about the challenges of starting that business. Perhaps it would help to be more explicit so that assumptions about where the difficulties lie are clearer and more subject to testing, revision, and hopefully mastery.
Posted on March 29, 2017 @ 06:14:00 AM by Paul Meagher
There is no shortage of good news stories about startups and businesses that are "crushing it". This can lead to the mistaken belief that making it is easier than it is, that it is just a matter of will and determination. There are many examples of businesses that had lots of will and determination that nevertheless failed. While will and determination might be necessary for business success it is by no means sufficient.
You can't learn much by only studying positive examples, you also have to study the failure modes. You can certainly learn some things by studying how Elon Musk, Bill Gates or Warren Buffet achieved the success they have, but I would argue that you will probably learn more by talking with entrepreneurs who have experienced failure so that you can appreciate how many things can go wrong and how difficult it can be to be successful in business.
It is for this reason I would suggest that entrepreneurs need to cultivate a repository of failed business stories in addition to a repository of successful business stories. You probably don't have to go very far to find entrepreneurs who have started a business that ultimately failed. You might regard this exercise as a dismal undertaking but my experience is that it can be intellectually stimulating and enlightening to find out the many ways in which the world confounds our expectations. So instead of just seeking out mentors, perhaps we should also be seeking out anti-mentors, people whose business has gone down the tubes and who are willing to share their knowledge of what went wrong.
Making good choices relies on forecasting the future. Accurate forecasting requires exposing ourselves to as many successes and disappointments as possible. We need to sit in crowded and empty theaters to know how movies will perform; we need to spend time around both babies and old people to accurately gauge life spans; we need to talk to thriving and failing colleagues to develop good business instincts.
That is hard, because success is easier to stare at. People tend to avoid asking friends who were just fired rude questions; we're hesitant to interrogate divorced colleagues about what precisely went wrong. But calibrating your base rate requires learning from both the accomplished and humbled. ~p. 196
Posted on December 9, 2016 @ 06:59:00 AM by Paul Meagher
I forget where I heard or read it, but someone off-handedly mentioned a "degree in reasoning" and the idea has since resonated with me. As far as I can tell there is only one university, the University of Kent, that offers a post-graduate degree in reasoning. It does not appear to be offered as an undergraduate degree anywhere.
What interests me about the "degree in reasoning" idea is whether it would be a practical degree to have, who might employ such a person, how adaptable and relevant it might be, what the curriculum might consist of, and so on. I have studied reasoning in its various forms for many years starting in my undergraduate years where I took courses in logic, marked argument evaluation assignments in basic logic, studied cognitive science, probability theory, and learned how to program. More recently I am studying Probabilistic Graphical Models, Bayesian Networks, and Causal Inference as newer approaches to reasoning. The problem is that all this learning is happening across different disciplines and departments with no overarching focus. Perhaps if there was a Degree in Reasoning I would have been able to claim a focus and could be judged according to how knowledgeable I was in that discipline. How cool would it be to be take a masters degree in reasoning so you could call yourself a Master of Reasoning :-)
Perhaps I should have taken some tests of reasoning ability in my
undergraduate years and then continued to take them through the years to determine if I have become better at reasoning. One would expect that a degree in reasoning would yield improvements in tests of reasoning. One approach to figuring out what a degree in reasoning should consist of would be to consider what types of tests we might use to measure it and design a curriculum that would foster improvement in those test scores.
Reasoning can be viewed as a type of meta-cognitive skill that improves your rate of learning new skills and helps you to correctly figure out consequences of actions before engaging in those actions. Someone who is good at reasoning, for example, should be able to pick up new programming languages more quickly than someone who is not as good. They might also be able to design a program in more detail before engaging in coding than someone with less reasoning skill. They might avoid making as many mistakes because they figure things out in their heads before deciding to act. A good reasoner might be aware of the many biases and fallacies human reasoning is potentially subject to and use that awareness to avoid some of its short-comings. Finally, I don't think reasoning should be confined to the type of thinking that takes place in an ivory tower or in front of computer. There is alot of excellent reasoning that takes place when building a home, fixing a car,
planting a garden, or making a sale and we need to make sure these practical forms of reasoning are appreciated and incorporated into the curriculum (e.g., diagnose an automotive problem, build some stairs, etc..).
These are just a few preliminary thoughts on what a degree in reasoning might consist of. As to why we need it, I would argue that because it
is so difficult to predict the future and what skills it might require, we might be better off not studying a specific discipline but rather
studying how to reason in and across disciplines, be it law, computer science, medicine, politics, business, or the trades.
It is possible that probability theory provides a unifying framework for a large part of what we call "reasoning" so graduates might be expected to have a good grasp of probability theory and be able to solve a variety of probability problems better than those without a reasoning degree. The curriculum also needs to be driven by industry who might spell out what they expect from a degree in reasoning should they decide to hire someone with a degree in reasoning. It might, for example, be the ability to adapt to new job descriptions over time, to learn new things quickly, to make well-argued decisions, etc...
The popularity of books on reasoning such as Daniel Kahneman's Thinking, Fast and Slow (2011) speaks to the desire of many people to improve their reasoning ability. I think, however, that there needs to be more than just some books dedicated to reasoning, some institution needs to step forward and put together a degree in reasoning and see if that is the type of degree needed to address the uncertainty that undergraduates face when trying to decide what to study, and that employers face when trying to decide what type of employee they are looking for. It might also be the case that a degree in reasoning would be excellent preparation for a career as an entrepreneur or investor.
Posted on February 15, 2016 @ 06:52:00 AM by Paul Meagher
I previously blogged about David Lang's book Becoming A Maker (2013) when I was a quarter of the way through it. I finished it off this morning and wanted to post a few more observations about it.
In the later parts of the book David discusses some of the technology and tools that you might find in a communal makerspace setup. One professional-level makerspace is Techshop where you can pay a fee and have access to wide range of high-end maker tools as well as classes to learn how to operate them. It is possible to start a business here by building your prototype and if you are successful in getting orders you can also use the facilities to manufacture units. You can learn from others who are similarly occupied and in some cases you might be occasionally employed by someone with a hot-selling product.
What distinguishes a maker tool from other tools is that maker tools are often used to make other tools. The TechShop at Austin-Round Rock allows you to reserve 3D printers, CNC machines, Welders, Heat Presses, Industrial Sewing Machines, Injection Molding Machines, Laser Cutters, Milling Machines, Powder Coating Equipment, Waterjets and more. In addition to all this hardware, there will generally be a need to use a variety of computer aided design software programs. It is alot of learn but if there is a community of makers around you this can make it easier to cope and eventually become a maker yourself.
Makers wanting to commercialize their offerings will often attempt to get funding on Kickstarter. One useful observation David makes about Kickstarter is that raising funding on Kickstarter is often more about activating a fan base that you have built up for your ideas than recruiting new people to fund your ideas. Some makers may be reluctant to share their ideas with others and in some cases that is understandable, however, it may put you at a disadvantage when it comes to raising money in a Kickstarter campaign because you haven't built up a fanbase prior to launching your campaign. One might consider Kickstarter another in the list of tools that makers should become familiar with.
David's book is still worth reading 3 years after its publication as an introduction to the maker culture and the tools that they commonly use. David would be the first to admit that this is an area where things are moving quickly and there is a danger of any publication becoming rapidly out of date. An example would be that David does not include much discussion of biotech makers who might have makerspaces that look more like university chemistry/biology labs (places to grow anything) than industrial workspaces (places to build anything). In the coming years we might expect these biotech toolsets to become more popular. It will give people with less financial resources access to tools that are normally only available to universities and corporations.
One of the main reasons the maker movement has become popular is because people are increasingly able to access maker tools that were once prohibitively expensive. Either the price has come down so people can purchase the tools for their personal use, or co-op and professional makerspaces have been setup that make access possible. Many of these co-op and professional makerspaces are appearing in larger cities first and there is still room for such spaces to grow in smaller cities and communities. Schools and public libraries are a common entry point for makerspaces in local communities.
I recommend David Lang's book as a way to get oriented to the maker culture. Chris Anderson, former editor of Wired Magazine, also wrote a book called Makers: The New Industrial Revolution (2012) that David makes frequent reference to. Here is a recent video of Chris talking about the Maker Movement:
There is huge amount happening in the maker movement today and you only need to google "maker movement" to take you where your particular interests might lead you.
This hierarchy of scales highlights another key dimension in understanding urban ecology. Typically the object or pattern of interest at a particular scale is strongly affected by characteristics at three scales. First, characteristics at the next broader or higher scale encompasses and tend to control the object. Second, characteristics at the next finer or lower scale help control and explain the internal mechanisms or functions of the object. Third, other objects at the same scale interact competitively or collaboratively with the object considered. These three hierarchical interactions effectively mold the form of an object and determine how it functions. (p. 12)
In Urban Ecology, for example, Forman posits these 9 different scales:
Major Land Use Type (e.g., residential, commercial, etc...)
Micro-site (e.g., wall, roof, basement, and so forth)
So if you are trying to understand some pattern at the city level then you should also think about the factors that influence and determine that pattern at the Metro scale and at the Major Land Use Type scale in order to better understand the drivers of that pattern and how it might evolve over time.
One aspect of this technique that should be noted is that what constitutes a scale or level of analysis is not always clear and the art of using this technique is in large measure defining the macro and micro
scales that are appropriate to understanding the object or pattern you are interested in. In the simplest cases you might be able to invoke some domain of physics or chemistry to define the micro scale of analysis. In the case of understanding how mosses grow (a recent interest of mine) the micro scale might be the soil profile under the moss and the macro scale might be the topography of the landscape that a particular type of moss is situated in. What you are trying to understand may suggest what micro and macro scales might be appropriate. The benefit you might derive from multiscale thinking may reside in defining what micro and macro scales might be appropriate to use.
Another aspect of this technique worth noting has to do with the reason for engaging in this type of analysis. My own feeling is that there is no direct benefit in adopting this approach unless you consider intellectual understanding a benefit. Otherwise, adopting this approach is not for the direct purpose of solving a problem or designing something. Prior to solving a problem or designing something, however, we need to understand the patterns we are observing and it is in this prior stage that a multiscale approach to understanding might be useful. Without a good understanding of the domain our problem solving or designs are likely to be less than optimal.
In the case of investing in a business, for example, a multiscale approach might be useful in understanding the viability of the business better. The business operates in a particular niche and we might evaluate the business with respect to competition and collaboration with other companies servicing a similar niche (level n). To follow this multicale approach we would also have to bring in the microscope and analyze the business at finer scale, and a macroscope to analyze the business at a broader scale. Once we have an understanding of the business at these three scales we might be in a better position to decide if we should invest in the business. So the investment heuristic here is only to invest in a business after you have performed an analysis at three scales.
I'm not sure at this point how the micro and macro scales should be defined for businesses in general. It would be nice to have set of scales like Forman does for urban ecology to utilize for understanding business patterns for the purpose of investing. I'm still trying to master multiscale thinking and would not want to try to define such a scale this early in the game. Studying some micro and macroeconomics texts would probably prove useful in such a quest. Perhaps in a future post I'll revisit this topic with some suggestions for scales that might include time and motion studies all the way up to global economic forces that can be used to better understand business patterns.
Allan Newell in Unified Theories of Cognition (1991) was very interested in understanding cognition at multiple scales and has one of the best extended discussions of multiscale modelling. Below is Newell's time scale of human action. Newell's book didn't address the social scale which is why it is not very details at this scale.
The idea that Vaclav Smil was Bill Gates' tutor was mentioned in a Globe and Mail article in 2010 after Bill reviewed some of his earlier books
and mentioned how much he liked his work and read everyone of his 30 books. So Vaclav has been offering up ideas that Bill has been following for awhile now.
The reason I mention all this is because I don't think enough people appreciate the scope and style of Vaclav Smil's work. The recommendation that Bill Gates has given to his work is one indication of how powerful a thinker he is. He has written many books that are impressive in their quantitative reasoning about various big issues confronting society today.
You can find lectures by Vaclav Smil on the internet. He is an intense speaker who some might find controversial for his pragmatic views on the oil and gas technologies and green technologies. Below is one of his more recent YouTube videos called Energy Transitions in which he discusses a wide range of issues on the topic of energy transition and redefines what we should be talking about under this label. I don't endorse all of his views but I certainly think his views are worth listening
to. This video is over an hour long and there is a section around the 28:30 to 29:45 when the sound cuts out. Vaclav was born in the Czech Republic in case you are wondering about his accent.
Posted on February 9, 2015 @ 04:43:00 PM by Paul Meagher
Coursera sent me an email alerting me to a new course I might be interested in called New Venture Finance: Startup Funding for Entrepreneurs. Turns our Coursera was quite correct. I just registered for the course, watched a few of the lecture videos, and examined the assigned reading materials. Everything looks solid and well done so I'm giving it my two thumbs up so far. The instructor Micheal R. Pratt from the University of Maryland has been involved in raising around $100 million in early stage funding so has some practical experience to go along with his academic background.
One final note is that the course is fully available now. Unlike some Coursera courses where new lectures, assignments, readings are made available each week, this one has everything available so you can dive in and binge learn or sample what interests you. This is a great resource if you want to learn more about how to raise capital. It just started on Feb 9th, 2015 so any time this week would not be too late to start.
Posted on October 4, 2014 @ 07:37:00 AM by Paul Meagher
I've had to deal with three screw ups recently. I've learned quite a bit from each one.
The first screw up happened yesterday and involved knocking over my digital camera. It was mounted on a tripod at shoulder height and when it tipped over it fell lens first into the pavement. It didn't shatter the lens as the lens is offset back from the lens barrel, however, it did bend the lens rim and I think it also messed with the guides that allow it to extend out as that feature does not appear to work anymore. My initial reaction was horror at my stupidity and then frustration that I would have to shell out for a new camera. As I began living with the idea of being cameraless, I knew I couldn't remain cameraless for long as it is a nice time of year to take pictures and I usually take quite a few pictures and videos on my camera in any given week. So I started researching the sales ads that came in the mail, then I went online, and finally I went to
the stores and comparison shopped in 4 different stores with good camera lines. In the end I settled with a Cannon Powershot SX50 HS. I learned what I wouldn't admit to myself before, that it was getting time for an upgrade. My previous digital camera was about 3 yrs old and while it had a nice 30x zoom in its day, my current camera has a 50x zoom and upgrades my camera in every dimension. It provides me with the next level of performance and encourages me to take my photography interests to a higher level. I'm no pro at this. If I were, the Rebel line of Canon cameras would be my choice of camera. I'm quite happy upgrading to this particular camera and have already started to learn new things about photography by purchasing it and watching some
YouTube videos on it. So breaking an old device is not the end of the world if getting a newer device opens up new options and produces a better experience. It may be the event that forces you to do what you should have done to improve your hobbyist experience or professional abilities.
The second screw up was that when I was driving down to my farm last night I didn't have any running lights or dash lights. I was pulled over by a police officer who pointed this out to me and told me to run with my flashers until I got to my destination and could fix it. I run an older 1996 Mazda B3000 farm truck and my mechanice took a short cut in fixing this problem in the past. He jumpered wires from one fuse to another. I showed the officer the setup and he was not too impressed. I showed him a blown fuse which probably explained why the jumper wires weren't working. He let me go without any tickets. I stopped at the next place along my route that had an automotive store and got a fuse hoping to fix the problem. I got the running lights and dash lights to work again by putting in a new fuse with the jumper wire back in place but the jumper wire soon started to melt the fuse and then kept blowing the fuse. I wondered why the truck had not caught on fire before this. So I drove the rest of the way to my destination with no jumper wires and my flashers on as it was night time and you would have a hard time seeing the rear end of the trailer I was hauling if I didn't have the flashers going on it.
It was when I was dealing with my third screw up that I realized the problem in my second screw up. My lawn tractor stopped running shortly after I turned on my night lights. I didn't have time to look into it too much when I was down last time, but I did notice that the leads running to one of my front lights had fallen off, was touching the frame below it, and the
two metal leads were melted/fused together. Based on my reading I suspected that I had blown a fuse when the light leads fell onto the frame and shorted out. I put in a new fuse and that fixed the starting problem. In the course of trying to find the fuse to replace, I followed a wire leading below the mower deck. I pulled it out a bit and noticed the covering had been scraped off and exposed wire was showing. I'm going to have to fix that now. So from this little episode I learned that the electrical system
on my lawn tractor is something I need to keep an eye on, not just the oil and air filters and keeping the deck underneath clean.
I then started to realize that my trucks electrical system has to deal with a trailer with running lights, signal lights, and braking lights on it. These running lights and signals draw electricity in addition to the electricity that
the running, signal, and braking on the back of my truck use. My theory is that the fuse I'm using cannot handle the electricity load being put on it when I hook up my trailer. I think I need a different fuse or I need to wire things differently. As I reflect on my experience, I believe I see a pattern where, when I hooked up my trailer, my dash and running lights stopped working and I got them working again the last time when I didn't have my trailer on. The jumper wires also don't cause melting when my truck does not have the trailer attached.
So these last two screw ups are starting to teach me about how to troubleshoot some electrical problems and making me feel a bit more interested in learning some basic electrical skills and theory.
As Paul Graham said in the third lecture of How to Start a Startup (see below), the fastest way to learn how to startup a business is to just start doing it and dealing with the screw ups. Its hard to appreciate that a screw up is a learning opportunity but if you can remember this and try to figure out how you might educationally benefit from fixing the problem, then you might be able to face your screw ups with a bit more calmness and good humor instead of going off the deep end and making problems worse. My screw ups have taught me alot on the last couple of days - in proportion to the number of significant screw ups I have made some progress on resolving.
Posted on March 6, 2013 @ 06:07:00 AM by Paul Meagher
Being an entrepreneur is not just about coming up with a good idea. If you are planning to raise funds from investors to fund your good idea then there are many terms, concepts, and processes related to raising capital that you should educate yourself about so that you can better navigate your way through the funding process. An excellent resource to use to educate yourself about entrepreneurship, and specifically, matters related to raising funds from investors is Frank Demmler's articles on entrepreneurship.
As you review and read Frank's list of articles you may want to reflect upon the idea of whether entrepreneurs are simply born that way or whether they have made the effort to learn how to be a better entrepreneur from resources like Frank Demmler's articles. I can tell you this, entrepreneurs are not born knowing what a convertible note is. Do you know what a convertible note is? That requires putting aside some time to learn about convertible notes and reflecting upon whether it might be a good tool to use to raise funds for your own project (i.e., relating the investment concept to your own situation and experience).
I can't believe they offer such high-quality and diverse course offering by world-leading experts for free. I feel like a kid in a candy store when I look over their course offerings. Recently I enrolled in a short course offering called Grow to Greatness: Smart Growth for Private Business, Part 1 by Edward D. Hess.
The course is, in part, based upon a recent book on the same topic by Edward Hess:
I tried to order the book through the usual online book retailers but there has been a run on the book as a result of the course offering so I ordered from Stanford's bookstore. The cost with shipping was competitive with all other online bookstores as I followed a discount link from the course to the book. One reason why professors would want to teach an online course via Coursera would be because of the significant jump in book sales that it produces.
Regarding the course, I would recommend it to entrepreneurs for two reasons. First, it discusses issues related to growth and in the first set of lectures it offered some excellent discussion on the perils of growth and what it takes to grow. Mr. Hess has spent a long time studying growth so it is useful to hear him speak on this issue. Second, Mr. Hess is a very dynamic lecturer so does a good job of holding your attention and interest. This cannot be said for many lecturers even though they may be a world-leading expert on a topic. I've spent time trying to fight off sleep listening to some lecturers. This is not the case with Mr. Hess. He makes a real and obvious effort to keep the viewer engaged. So thumbs up for this course so far, and thumbs up for Coursera.
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