Hard Things

I was having a lovely family dinner with my mommy and daddy and baby brother, who is in his first year of residency in Emergency Medicine .

My brother pulled out his iPhone. Wanna see what I do at work?

Not really, I said.

He offered up his phone anyway. On the screen was an x-ray image of a human pelvis. This patient came in to the ER last week, he said. He was 70 years old.

A shadowy cylinder floated above the gaping pubic bone.

What the hell is that??

A bottle, he said. I spent an hour and a half trying to pull it out. I finally had to send him to the OR.

AUGGHHHHHH, my mom said.

He was 70??

And I thought my job sucked.

Dr. Ou refused to email me the original image, so this is my best reproduction.
Dr. Ou refused to email me the original image, so this is my best reproduction.

It turned out that the attending physician later reproached my brother for waiting so long to send the patient to surgery. It shouldn’t have taken you 90 minutes to realize that this wasn’t working, the attending said. You wanted to avoid doing the hard thing.

Ah, the hard thing. Ben Horowitz writes all about Hard Things. He says that the two key characteristics that he and his partners look for when investing in entrepreneurs are brilliance and courage. The correct decision is often obvious, the hard part is having the courage to act on that decision. Sometimes it involves changing direction, sometimes it involves shuttering a company, sometimes it involves major surgery to remove an object lodged in an orifice.

Doing the easy thing incurs technical debt, management debt, and prolonged suffering. When in doubt, do the Hard Thing.

ben_horowitz

Experiences vs Commodities

ibox_billboard

Over 95% of Apple product owners keep the box their iThing came in. Did my Lenovo Thinkpad come with a box? I can’t remember. If it did, I recycled it for being brown and soulless.

The Apple box is a product itself. It even has a patent. But the Apple product starts before the box. Back in the store, with the glass staircase spiraling a great glass elevator. That’s what the Apple product is: an experience.

apple-store-glass-staircase-ideas

Making a phone call or connecting to the internet can be commoditized. Any Android device will get you there. I wouldn’t be able to pick a Galaxy or Nexus out of an Android police lineup.

All Look Same
All Look Same

Samsung and Google make commodity products. Substitutable, fungible, replaceable. A commodity has no qualitative differentiation within its class, so consumers will buy the cheapest version. To avoid commoditization, build an experience.

Lyft, a taxicab, and a Greyhound bus are all ways to get from Point A to Point B, but only one is an experience.

The Apple iBox is not just a box. It’s a satin-finished white cradle presenting the physical embodiment of cool. The user instantly feels like he’s gonna get laid. Now that’s something that can’t be commoditized.

See Also:
Apple and Nike –stratechery

Not Painful Enough

Mobile payments provider Square was valued at 3.25 Billion just a couple years ago. Now they’re hemorrhaging and likely to sell themselves off. What happened?

squareup

Square’s payment processing margins are razor-thin and sometimes negative. They can’t charge very much for their service because if they do, their customers will forgo Square and set up their own merchant accounts. Seeing as how small businesses provide the fastest-growing source of credit card service revenue, Visa and Mastercard have some incentive to make it painless to set up accounts.

Credit card processing for small merchants is slightly annoying but not actually that bad. Square is dying because the collective pain of payments processing is less than the pain of building Square.

Are all the consumer service startups providing more value to the world than it costs to maintain them? Is the suffering endured by people who have to shop for groceries greater than the cost of hiring a team of hipsters? If not, the pain of building the startup isn’t worth it.

See Also:
The Problem with Payments –stratechery

Your Margin is My Opportunity

Your margin is my opportunity. –Jeff Bezos, Amazon

That’s probably what Lyft and Uber were saying to each other as they slashed their commissions to 0. How do you beat a company that doesn’t need to make money?

The 8 hours you need to sleep each night, are my opportunity. The time you spend with your family and friends, is my opportunity. If you’re not maxed out, if there’s still a shred of humanity left in you, then you’re just leaving your lunch on the table.

It’s kind of like motorcycle racing. If you’re not riding at the physical limits of traction, that means it is possible for someone to go faster than you. And they will. It’s a contest to see who can come the closest to crashing without actually crashing.

Not quite on the sidewall yet, Pedrosa. Try harder.
Not quite on the sidewall yet, Pedrosa. Try harder.

What is Big Data?

Big Data refers to the masses of information that exist in the universe.

Data scientists build tools to extract data from the world and turn it into structured data sets. Data analysts synthesize these sets into actionable knowledge. And knowledge is power.

These days, everyone wants data scientists on their team. Just because data is big does not mean it provides information.

data

See Also:
Everything You Need to Know About Big Data to Keep Your Job –Institutional Investor