A list of interesting ideas I've run across that I've tried to internalize or at least not immediately forget.
| Power to the people | Tools like Zillow and Expedia that make previously hidden data and tools available to consumers. - Rich Barton |
| Hackable tests | Tests that try to assess something by proxy (for example, the SAT as a proxy for intelligence) are susceptible to hacking (test prep). If the rewards to a test are great, people with resources will be in the best position to hack it. - Paul Graham |
| Increasing returns | Some technology products can exhibit increasing returns to scale (for example, products that have network effects), rather than the decreasing returns on capital as they scale, as predicted by classical economic models. - W. Brian Arthur |
| Physiological moonshots | It’s easier to create a physiological moonshot, than a technical moonshot. In other words, make a product feel 10x better, rather than be technically 10x better. Apple's iPhone is an example in phones, Uber is an example in transportation compared to taxis. - Rory Sutherland |
| Find the hard side | If you’re building a marketplace, start by figuring out which side is the hard side. Do you need to subsidize or spend to acquire the hard side? The hard side of a marketplace might not be fixed throughout the life of the company. - Chris Dixon |
| Definition of a brand | A brand is the result of delivering high quality and low variance over time. - Tobias Lütke |
| Self tyranny | We cannot invent our own values, because we cannot merely impose what we believe on our souls. We will rebel against our own totalitarianism. - Carl Jung |
| Criticize sparingly | People will remember a single critical comment 10x more than heaps of praise. - John Mackey |
| Good marketplace ideas | If incremental suppliers (producer penetration) do not continuously make a service better for consumers, it’s probably not a good marketplace idea. - Bill Gurley |
| Complex systems evolve | You can’t airdrop a complex system. Complex systems aren’t made, they evolve from simple systems. - John Gall |
| It takes a village to organize a mind | People organize their brains with conversation. If they don’t have anyone to tell their story to, they lose their minds. Like hoarders, they cannot unclutter themselves. The input of the community is required for the integrity of the individual psyche. - Jordan Peterson |
| Connect directly | Nick emailed two customers every day who had eaten at the restaurant or posted on their blog about Alinea. He does this through social media now. - Nick Kokonas |
| The idea maze | Good founders don’t have a magic idea, they have a view of the idea maze of a market and how various turns in the maze are likely to impact value creation or death. - Balaji Srinivasan |
| Pick your competitors | Pick your competitors carefully because you will become a lot like them. - Larry Ellison |
| Measure pain of loss | A leading Indicator of product market fit: ask active users (who have used the product at least twice in the last two weeks) “how would you feel if you could no longer use the product?” and measure the percent who answer “very disappointed.” The magic number for PMF is over 40%. - Sean Ellis |
| Go slow to go fast | Select a small number (5-10) of users and build exactly against their needs. Take care to make sure their needs are generalizable and not custom to the customers (user-led customer development). - Chetan Puttagunta |
| Relationships > authority | Your ability to drive change is about the quality of your relationships, not authority bequeathed by a hierarchy. In parenting hierarchy works with a 2 year old, but not when children are 25. - Sam Hinkie |
| Godwin’s Law | As an online discussion grows longer, the probability of a comparison involving Nazis or Hitler approaches one. - Mike Godwin |
| Efficiently inefficient markets | Markets cannot be perfectly efficient because there is a cost to gathering information and reflecting it in prices. As compensation for this cost there should be a requisite benefit in inefficient markets. Markets have to be efficiently inefficient - inefficient enough to incentive you to make them efficient. - Grossman and Stiglitz |
| Eigenquestion | An eigenquestion is the question where, if answered, if likely answers all subsequent questions as well. - Shishir Mehrotra |
| The Lindy Effect | The longer something lasts, the longer it can be expected to last. - Nassim Taleb |
| Lollapalooza effect | Several smaller scale factors of human biases, tendencies and/or actions, when acting together, can conspire towards a certain (and often very significant) outcome. - Charlie Munger |
| Style diversity breakdowns | Market inefficiencies result from style diversity breakdowns. Everyone doing the same thing, rather than everyone doing the wrong thing. The key to successful contrarian investing is to focus on the folly of the many, not the few. - Mauboussin Michael |
| Shopify's mantra | We want to make the important stuff easy and the rest possible. - Alex Danco |
| The narrative fallacy | From The Black Swan, the tendency of people to interpret complex series of random events in simple cause-and-effect narrative stories. - Nassim Taleb |
| The Regret Minimization Framework | Jeff Bezos explains: “When you are in the thick of things, you can get confused by small stuff,” Bezos said a few years later. “I knew when I was eighty that I would never, for example, think about why I walked away from my 1994 Wall Street bonus right in the middle of the year at the worst possible time. That kind of thing just isn’t something you worry about when you’re eighty years old. At the same time, I knew that I might sincerely regret not having participated in this thing called the Internet that I thought was going to be a revolutionizing event. When I thought about it that way… it was incredibly easy to make the decision.” - Jeff Bezos |
| Paradox of Skill | As people become better at an activity, the difference between the best and the average and the best and the worst becomes much narrower. As people become more skillful, luck becomes more important. - Michael Mauboussin |
| Invest in broken | Invest in things that look broken and are growing anyway. Design is the end of innovation. - Gabriel Leydon |
| Preferential attachment | The phenomenon where initial differences in preference, even modest ones, are amplified over time. The result is that the initially rich get richer. - Barabási and Albert |
| Statistical stationarity | Good statistics are both reliable, persistent and predictive. They measure the same quantity over time. - Unknown |
| The end of history illusion | The tendency for people to be keenly aware of how much they’ve changed in the past, but to underestimate how much their personalities, desires, and goals are likely to change in the future. - Daniel Gilbert |
| The Diderot Effect | The idea that obtaining a new possession often creates a spiral of consumption that leads to additional purchases. - Denis Diderot |
| Load-bearing status quo | Tradition and culture in construction is load bearing - “the way we’ve always done it” is the answer to how we’re able to do it all. - Brian Potter |
| The Copenhagen interpretation of ethics | When you observe or interact with a problem in any way, you can be blamed for it. At the very least, you are to blame for not doing more. Even if you don’t make the problem worse, even if you make it slightly better, the ethical burden of the problem falls on you as soon as you observe it. In particular, if you interact with a problem and benefit from it, you are a complete monster. - Jai |
| Fractal problems | The best kind of problems to work on are fractal. The more you zoom in on them you just keep finding problems to solve. - Ernest Garcia |
| Jevons Paradox | When technological progress or government policy increases the efficiency with which a resource is used, but the falling cost of use increases its demand, increasing, rather than reducing, resource use. - William Stanley Jevons |
| Shibboleths beliefs | People are embraced or condemned according to their beliefs, so one function of the mind may be to hold beliefs that bring the belief-holder the greatest number of allies, protectors, or disciples, rather than beliefs that are mostly true. - Steven Pinker |
| Schelling point | In game theory, a Schelling Point is a solution that people tend to choose by default in the absence of communication. - Thomas Schelling |
| Honest signal | An honest signal is one whose cost (to the signaler) makes it harder to fake - like a public sacrifice. - Unknown |
| Value rationality | Whereas “instrumental rationality” refers to efforts to anticipate possible outcomes and calculate advantage, value rationality describes situations in which people make decisions, not based on what they think will most benefit them, but to fulfill the right thing to do—that is, to do something right for its own sake. Rather than what has been called a logic of consequences (weighing the value and cost of outcomes relative to one’s goals), they employ a logic of appropriateness, a form of judgment in which decision-makers are concerned about doing what is right or appropriate given their role and the circumstances. - Max Weber |
| Semmelweis reflex | A reaction that denotes denying new results out of principle. The best we can hope to do is to be conscious of the Semmelweis reflex and try to examine our best loved ideas more closely against available evidence. As Charlie Munger put it, “Any year you don’t destroy one of your best loved ideas is probably a wasted year.” - Ignaz Semmelweis |
| Meta-Malthusian trap | Every successful organization runs into invisible asymptotes. It’s good at solving one set of problems (user growth and profitability), so its constraints are mostly from problems it’s bad at dealing with (for example, politics and PR). - Byrne Hobart |
| Berkson's paradox | The false observation of a negative correlation between two desirable traits, i.e., that members of a population which have some desirable trait tend to lack a second. Berkson's paradox occurs when this observation appears true when in reality the two properties are unrelated—or even positively correlated—because members of the population where both are absent are not equally observed. - Joseph Berkson |
| Perkins’s law | Market risk is inversely proportional to technical risk, because if you solve a truly difficult technical problem, you will face minimal competition. - Tom Perkins |
| Positional goods | Goods and services that people value because of their limited supply and because they convey a high relative standing (status) within society. - Fred Hirsch |
| Minsky moment | The onset of a market collapse brought on by the reckless speculative activity that defines an unsustainable bullish period. These occur when investors, engaging in excessively aggressive speculation, take on additional credit risk. Minsky Moment defines the tipping point when speculative activity reaches an extreme that is unsustainable, leading to rapid price deflation and unpreventable market collapse. - Hyman Minsky |
| Cognitive flexibility theory | Case studies are more important than concepts, experts in ill-structured domains reason by comparison to previous cases, not by reference to first principles. - Rand Spiro |
| Narrow waist | If you want many, many things to be able to interoperate with many, many other things, there needs to be a narrow waist that is as constrained as possible between them. - Alex Danco |
| Pascal’s wager | In moral philosophy, it posits that human beings wager with their lives that God either exists or doesn’t. Pascal argues that a rational person should live as though God exists, since the upside is infinite and the downside of waisted time is capped. - Blaise Pascal |
| The St. Petersburg Paradox | A game that formally suggests infinite expected value of a wager, which challenges the idea that people should be normatively rational. - Nicolaus Bernoulli |
| The repugnant conclusion | Highlights a problem in population ethics. For any given population size and aggregate quality of life, there must be some larger imaginable population whose existence, which if other things are equal, would be better even though it’s members have lived that are barely worth living. - Derek Parfit |
| The bicameral mind | A hypothesis that the human mind once operated in a state in which cognitive functions were divided between one part of the brain which appears to be speaking and a second part which listens and obeys, and that the breakdown of this division led to human consciousness. A bicameral mind would experience consciousness as a hallucinatory voice of god. - Julian James |
| Reflexivity | The phenomenon where changes in asset prices impact underlying asset values, rather than prices purely reflecting underlying asset values. - George Soros |
| The Noah rule | Predicting rain doesn’t count, building an ark does. - Warren Buffett |
| The orangutang theory | If a smart person goes into a room with an orangutang and explains their idea, the orangutang just sits their eating his banana, but at the end of the conversation, the person explaining comes out smarter. - Charlie Munger |
| OODA loop | The OODA loop is simple to state: all humans act by Observing their environment, Orienting within it — that is, organize the messiness of reality in their heads by generating mental models or generate pictures of the situation, perhaps by using a framework from a business school if they are intellectually compromised — Decide a course of action, and then Act on it. - John Boyd |
| The Barnum effect | A common psychological phenomenon whereby individuals give high accuracy ratings to descriptions of their personality that supposedly are tailored specifically to them, yet which are in fact vague and general enough to apply to a wide range of people. - Bertram Forer |
| Rawls’ veil of ignorance | In the original position, you are asked to consider which principles you would select for the basic structure of society, but you must select as if you had no knowledge ahead of time what position you would end up having in that society. This choice is made from behind a "veil of ignorance", which prevents you from knowing your ethnicity, social status, gender and, crucially in Rawls' formulation, your or anyone else's idea of how to lead a good life. Ideally, this would force participants to select principles impartially and rationally. - John Rawls |
| Adjacent possible | The adjacent possible is a kind of shadow future, hovering on the edges of the present state of things, a map of all the ways in which the present can reinvent itself. As Steven notes, the adjacent possible “captures both the limits and the creative potential of change and innovation.” - Stuart Kauffman |
| Scenius | The idea of the “collective genius” that manifests in certain social groups at different times. Xerox PARC, Bell Labs, The Bloomsbury Group – all are examples of scenius, stories defined not so much by a single visionary as the extraordinary generativeness of a group. - Brian Eno |
| The Hawthorne Effect | The Hawthorne Effect posits that productivity tends to increase when workers believe that their bosses are showing a greater interest and involvement in their work. - Elton Mayo |