Insights #11: April 2019

Distilled lessons, ideas and wisdom from the past month

Content summary
1: On the limits of productivity and the omissions of the ‘10,000 hour’ rule
2: Tips on how to give a good presentation
3: How to evaluate digital marketplaces
4: Why a privileged upbringing helps in the modern workplace
5: Amazon CEO Jeff Bezos on two types of decision-making
6: The ways in which network features impact the performance of platform companies
7: ‘Fruitful suffering’: making the most of bad experiences
8: Tips on assessing a start-up for prospective employees
9: What Google’s research taught it about building effective teams
10: A framework for having difficult conversations

Blog sign-up

 

1: Why you should work 4 hours a day, according to science

An extract from ‘Rest: Why You Get More Done When You Work Less’ by Alex Soojung-Kim Pang looks at the relationship between working hours, skill development and productivity.

As Pang notes, many of history’s most productive people, including Charles Dickens and Charles Darwin, worked surprisingly short hours, while several studies have indicated that around four hours of work per day is optimal.

One of these studies, which was led by Anders Ericsson and looked at the practicing habits of elite violinists,  formed the basis of Malcolm Gladwell’s argument (laid out in his book ‘Outliers’) that it takes around 10,000 hours of practice to become an elite performer in any endeavour. However, this rule represents a simplified interpretation of the original study, notably overlooking two key points:

1: Only 10,000 hours of deliberate practice (in which people engage in a structured manner with full concentration and focus, pursuing clear goals and receiving feedback that helps them to spot ways to improve) is sufficient to reach mastery.

2: Deliberate practice can be gruelling, requires significant levels of sacrifice and may not be immediately rewarding, so can only be sustained if driven by a compelling motivator.

Given the nature of deliberate practice, it can only realistically be sustained for a limited period each day (up to around four hours), and in excess leads to injury or burnout. While approaches vary from person to person, Ericsson found that the optimal pattern often involves working for sessions of 80-90 minutes, with 30 minute breaks, and concentrating these in the morning. It therefore takes around a decade to amass the required amount of deliberate practice to reach expert level.

As Pang notes, such finding run counter to prevalent beliefs about productivity, noting that:

‘This illustrates a blind spot that scientists, scholars, and almost all of us share: a tendency to fixate on focused work, to assume that the road to greater creativity is paved by life hacks, propped up by eccentric habits, or smoothed by Adderall or LSD. Those who research world-class performance look only at what students do in the gym or practice room. Everybody concentrates on the most obvious, measurable forms of work and tries to make those more productive. They don’t ask whether there are other ways to improve performance and your life.

This is how we’ve come to believe that world-class performance comes after 10,000 hours of practice. But that’s wrong. It comes after 10,000 hours of deliberate practice, 12,500 hours of deliberate rest, and 30,000 hours of sleep.’

 

2: How to present like a professional

In a video on FT.com, Oxford university careers adviser Jonathan Black and FT columnist Sam Leith provide a number of tips on giving a good presentation.

They note that content should be designed to entertain, engage and convey a key message (i.e. not attempt to cover everything on the topic in question). It should also make clear from the beginning how it will benefit those present, which should encourage them to pay attention.

Presenters should tell people what they are going to tell them (agenda slide), tell them (content) then tell them what they told them (summary slide).  The content should follow a logical progression, with each slide conveying one main idea and used for at least a minute. Slide backgrounds should be kept simple, text limited and legible (using clear and simple fonts) and graphics used to show content that would be too difficult or time consuming to describe (e.g. maps or photographs). Distracting animations should be avoided. Presenters should also help audience members to understand where in the presentation they are (e.g. by showing a progress indicator or telling them how many slides / how long the presentation will take at the beginning).

Audiences do not always consume all of the content provided so presentations should make it as easy as possible to get the main gist. A good way to achieve this is to follow a structure that provides what Barbara Minto describes as ‘horizontal’ and ‘vertical’ logic – each slide should have a headline the conveys the key point (so the headlines alone combine to form a logical argument), with content below each conveying why it is important and providing supporting evidence.

People learn in different ways and any audience is likely to comprise four different groups: theorists (who like theories), activists (who like practical examples), pragmatists (who want stories) and reflectors (who want to be able to digest content in their own time). Information should be provided in different forms to suit all groups, for instance through using a mixture of percentages, ratios and fractions.

Presentation style should be confident but not overly so, warm, empathic, open and honest (i.e. presenters should admit when they don’t know something), while debate and challenge should be welcomed. If asked a question, presenters should repeat and rephrase what has been asked to remove any emotion, and finish the answer by looking at someone else, which prevents the questioner from responding by asking another question.

A number of techniques may be used to improve delivery, including:

  • Storytelling: stories are relatable and give a narrative shape to the argument.
  • Tricolons: grouping arguments into three (commonly used in political speeches).
  • Rhetorical questions: these are a good way to engage audiences.

Presenters should avoid using notes (they can get in the way or confuse) and should not simply read out the text on slides, but should explain what charts or graphics are showing before going into why they are important.

All presentations should be practiced beforehand, ideally in front of a small audience. Failing this, videoing practice runs can help to spot any issues or identify ways to improve.

 

3: All Markets Are Not Created Equal: 10 Factors To Consider When Evaluating Digital Marketplaces

Venture capital investor Bill Gurley (of Benchmark, an early ebay backer) outlines 10 factors to consider when assessing the potential of online marketplaces. He suggests that marketplaces with high potential:

1: Go beyond aggregating a market to enhance it, offering features that were not previously available or even possible. This leads to word of mouth marketing and viral growth.

2: Offer enhanced economic advantages for both sides e.g. save or make more money.

3: Add value through technology e.g. GPS tracking in UBER.

4: Address high levels of buyer and supplier fragmentation. A concentrated supplier base is unlikely to allow a new intermediary into the market – for this reason, marketplaces offering hotel bookings have fared better than those offering flight bookings.

5: Face low friction in supplier sign-up. An involved sign-up process slows growth and increases costs, but can act as a barrier to entry / growth for competitors at a later stage.

6: Target large markets of which a sizeable percentage is likely to use an online marketplace. For example, healthcare is a large market but conservative and slow moving.

7: Have an ability to expand the market for the whole industry e.g. Uber has resulted in many more taxi rides being taken.

8: Benefit from high frequency of use / short buying cycles. This makes it easier to build brand and encourage word-of-mouth marketing. In some situations, an initial match may result in a long-term relationship and remove the need for the buyer to re-use the marketplace (e.g. where a home owner connects with a cleaner and then pays them directly after the initial engagement).

9: Is part of the payment flow e.g. collects payment from buyers and pays supplier net of fees, as opposed to billing suppliers separately. This makes it easier to extract a cut of any transactions and less likely that the platform expense is viewed as a tax.

10: Enjoys network effects, meaning that the experience / value delivered improves with more users.

As Gurley notes, few opportunities are likely to offer all 10 features and in any case success depends on effective execution.

 

4: The ‘Hidden Mechanisms’ That Help Those Born Rich to Excel in Elite Jobs

An Atlantic interview with sociologists Daniel Laurison and Sam Friedman, authors of ‘The Class Ceiling: Why It Pays to Be Privileged’, reveals some interesting insights into the ways that modern workplaces can favour employees that have enjoyed an affluent upbringing.

Studies have shown that people born into working-class families are less likely to secure a job in an ‘elite’ profession (e.g. law, medicine or finance). Even when they do, they will typically earn much less than colleagues with middle-class backgrounds.  Laurison and Friedman identify a number of factors underpinning such observations:

1: The affluent enjoy a ‘financial cushion’ that makes it much easier to pursue careers in fields that are initially low-paying or that require unpaid work placements or graduate degrees to get into. Family support can also subsidise people when living in expensive cities that ultimately provide access to more opportunities.

2: Within elite organisations, mentoring or sponsorship of new recruits often plays a big role in career advancement. However, people tend to like those who they view as similar to themselves (a phenomenon that sociologists refer to as ‘homophily’), and can find it difficult to separate such connections from assessments of intelligence or ability. In elite organisations (which, for historical reasons, are disproportionately run by middle-class, white males) this tends to negatively impact women, people from working-class backgrounds and ethnic minorities.

3: Successful navigation of elite organisations is reliant upon conforming with unwritten codes of behaviour, such as how to speak, act or dress. People typically find professional environments that are far-removed from those to which they are accustomed to be more challenging.

The research provides a reminder of the hidden dynamics that help some while hindering others, leading to radically different outcomes irrespective of inherent ability.  As the authors note, a failure to recognise such dynamics, and thus assume that outcomes are meritocratic, plays a role in legitimising inequality. They note that companies could do more to address the issue, for instance by changing workplace cultures to be more aligned with historically excluded groups, rather than simply trying to teach them how to better adapt.

 

5: Jeff Bezos: There are 2 types of decisions to make, and don’t confuse them

Writing in Business Insider, Matt Rosoff highlights an interesting point on decision making raised by Amazon CEO Geoff Bezos during an annual shareholder letter.

Bezos distinguishes between two types of decision: reversible and non-reversible. A reversible decision, such as deciding to launch a new product, can be wholly undone, while a non-reversible decision, such as selling a subsidiary, represents a permanent (or very difficult to undo) move.

He argues that organisations, particularly as they get larger, confuse the two types of decision or apply the same decision-making process across both scenarios. This slows progress and introduces unnecessary risk aversion, leading to sub-optimal levels of experimentation and innovation (i.e. they are too conservative when approaching decisions that are wholly reversible).

However, treating irreversible decisions lightly is a bigger mistake.

 

6: Why Some Platforms Thrive and Others Don’t

Writing in the Harvard Business Review, Feng Zhu and Marco Iansiti of Harvard Business School look at why some platforms (such as Facebook) flourish while others flounder.

They note that digital platforms differ from traditional companies in several important ways. They find it easier to scale up given that the cost of serving additional customers is negligible, while much of the operational complexity is outsourced to service providers or addressed through software, meaning that growth is not limited by human or organisational constraints (platforms don’t deliver the product or service, but oversee a largely automated operation).

Generally, they note, ‘it’s often easier for a digital platform to achieve scale than to sustain it’ (competitors can also easily scale) and ‘lasting competitive advantage hinges more on the interplay between the platform and the network it orchestrates and less on internal, firm-level factors.’ They identify five properties of networks that have an important bearing on this:

1 – Strength of Network Effects: Network effects can be direct (e.g. user to user) or indirect (e.g. user to seller), and the strength of these can vary significantly. For example, games platforms only need a few hits to be successful (weak network effects), while a social network requires lots of users to deliver value. Network effects can also change over time (e.g. the internet diminished the pull of Microsoft). In some cases, companies can design their products to increase network effects, while learning effects (e.g. Amazon’s recommendation algorithms) work in similar ways.

2 – Clustering: Networks that are fragmented into disparate local clusters (e.g. Uber) are more vulnerable, as competitors can reach critical mass in a local market through differentiation. Conversely, competing with a platform such as Airbnb requires reaching critical mass on a global scale. Platforms can sometimes create global clusters on top of local ones, for example when local listing services offer nation-wide features.

3 – Risk of disintermediation: disintermediation can occur when users no longer need the platform after an initial match (e.g. situations involving long-term relationships, such as finding a cleaner). Platforms attempt to prevent this via terms and conditions or blocking the exchange of contact details, but adding more friction to the service creates vulnerability to competitors. Platforms can also address this risk by providing additional services such as insurance or payment escrow, or else explore different revenue streams or models.

4 – Vulnerability to multi-homing: multi-homing occurs when users form links with multiple platforms simultaneously (generally where the cost of adopting an additional platform is low e.g. restaurants and delivery staff working with multiple food delivery platforms). Where this is pervasive on both sides of the platform, it is difficult for platforms to generate a profit. Platforms may attempt to incentivise exclusivity, for instance by paying bonuses for a certain level of use, or locking-in users through schemes such as AmazonPrime. Often, reducing multi-homing on one side of the platform increases it on the other e.g. forcing taxi drivers to work for just one ride hailing platform may reduce supply on any one, encouraging consumers to adopt additional options.

5 – Bridging to multiple networks: platforms that can leverage their user base and the data collected about it to move into new synergistic sectors or businesses will be more likely to thrive.

 

7: What if controlling unhappiness contains the secret to happiness?

‘What doesn’t kill me, makes me stronger.’ – Nietzsche

Writing in Medium, Maarten van Doorn looks at how best to deal with difficulties. Despite Nietzche’s famous dictum that ‘what doesn’t kill me, makes me stronger’, studies show that exposure to stressors can lead to a host of issues including depression, anxiety and heart disease. Given the elusiveness of happiness and inevitability of suffering in life, learning how to ‘suffer fruitfully’ may be more important for wellbeing than the pursuit of happiness. 

In the Happiness Hypothesis, psychologist Jonathan Haidt argues that people can primarily benefit from trauma in three ways:

  • Rising to a challenge unveils unknown capabilities, which enhance self-image
  • Traumas can filter out weak relationships and enhance strong ones
  • Traumas can act as a wake-up call that force people to reassess their life and stimulate important, and ultimately beneficial, life changes.

In ‘Opening Up’, Jamie Pennebecker argues that benefits may be derived from suffering if sense can be made of it (i.e. ‘why did it happen’) and constructive lessons drawn (‘what good can be derived from it?’). Key to this is ‘self-disclosure’, or putting suffering into words, either by talking or writing about it. This allows it to be placed within the context of a meaningful story, and has been shown to be more effective in avoiding negative impacts on health than other approaches to expressing emotion.

Van Doorn argues that such an approach allows people to move from ‘mindless unhappiness’, where they unconsciously resist the state of the world, to ‘mindful unhappiness’, which involves being aware that suffering relates to external factors, and actively choosing to either accept or attempt to change them.

 

8: How to Choose a Startup to Work For by Thinking Like An Investor

Investor and entrepreneur Harj Taggar looks at how to evaluate an employment opportunity at a startup company.

As an initial point, prospective employees should make sure that they actually want to work at a startup. In most cases, it involves more work and lower pay, but can offer better learning opportunities and the chance of a large future payout.

To identify a good startup to work for, Taggar advises candidates to:

1: Look for evidence that it is already succeeding.

Successful startups attract the best investors and talent, providing better learning opportunities / networks and more resources. They also offer ‘remarkably steep career trajectories’ as rapid growth creates ‘vacuums of responsibility’ that represent opportunities to develop for existing but seemingly under-qualified employees. Being associated with a successful startup also creates a halo effect that will make employees more attractive to other companies.

Where data is available, trajectory matters more than absolute figures (e.g. a company generating low levels of revenue but doubling this month-on-month is more exciting than a larger company with low growth). Employees should reevaluate the company trajectory each year, although all startups inevitably go through tough times so hasty decisions to leave based on short-term trends may be mistaken.

2: Evaluate founders

This can be challenging as standard signals like education or work history can be irrelevant or even misleading when assessing suitability to found a company (e.g. they may signify a need for structure) while there is no clear definition of what a successful founder should look like.

Taggar advises that founders be assessed in terms of their accomplishments relative to their peer group and environment. For instance, raising money with little experience while based in a backwater is more impressive than doing so as a former Google engineer based in Silicon Valley.

Assessment should also look at how well a founder understands the problem they are addressing. This can be easy for domain experts but, failing this, a good approach is to ask the founder to provide an overview of the problem, and see how well they explain product choices, market dynamics and competitors. Candidates should also ask founders about the assumptions they made that turned out to be wrong – it is suspicious if they claim they have made no mistakes.

The relationship between founders is also important. Co-founder conflict is one of the biggest causes of startup failure, and warning signs include talking over one another and disagreements. It should also be clear who is the CEO, and clear that there is common agreement on this.

The wider team can be a useful source of information into potential issues that the founders may not have revealed. After receiving an offer, arranging to have coffee with anyone encountered during the interview process can provide a good opportunity to ask about problems.

Candidates should also ask about how ideas are generated and work assigned. Taggar writes thatI believe early stage startups work better as benevolent dictatorships. You want at least one of the founders to have strong product opinions and be the final product decision maker. Early on, speed of action matters most to a startup, and decisiveness is a good trait in startup founders because it creates motion.’

3: Evaluate product and market

The product should be assessed but it is a mistake to expect perfection – the most important thing is that the company can explain why it delivers a better experience than the competition (sacrificing some quality to move quickly and gain users is often a good strategy at a startup). This may not apply in more established markets where incumbent offerings are of high quality – in such cases, startups should spend more time building their product before launching.

Startups generally operate in one of two markets – a new market that is growing quickly, or a large and established market with large incumbents. Which one is relevant impacts the assessment of the company – for instance, being a first-mover in a nascent market that is growing quickly confers significant advantage that can make up for deficiencies in the team or product. Established markets will be less forgiving, so an exceptional team, significant resources and strong differentiator may be necessary to have any chance of succeeding.

 

9: Google on teamwork

‘The whole is greater than the sum of its parts’
– Aristotle

Google reports on the findings of Project Aristotle, a research initiative designed to uncover the factors underpinning effective teamwork within the company.

The researchers note that teams are both important and problematic – they are essential to the performance of an organisation and yet inevitably unleash a host of issues that arise whenever people interact closely with one another over extended periods. Part of the issue is that the definition of a team can vary greatly (it will generally involve a group of people with a high degree of interdependence) while different people have different measures of team effectiveness (e.g. executives may focus on outputs and members on culture).

Google’s research found that the ways in which a team works are more important than the composition of its members. The most important features of a performant team were found to be:

  • Psychological safety: a feeling of being safe to take risks (admitting a mistake, asking questions or suggesting ideas) without being viewed negatively. This may be promoted by actively soliciting opinions from team members and proactively sharing preferences on working style.
  • Dependability: team members reliably complete high quality work. This may be promoted by clarifying roles and responsibilities and establishing transparent project plans.
  • Structure and clarity: each member has a clear understanding of the the goals (individual or team-wide) they are working towards, how these should be met and the consequences of them. These should be specific, challenging and obtainable, and regularly communicated. Team meetings should have a clear agenda and an assigned leader.
  • Meaning: a sense of purpose in the work or output. This can vary between individuals, but may be promoted through expressions of gratitude, positive feedback for good work and offers of help when people encounter difficulties.
  • Impact: feeling that any work undertaken is making a difference, for instance to the goals of the organisation or wider society. This may be promoted through creating a clear vision that links individual input with broader objectives and reflecting on the work and its impacts.

Interestingly, the research suggested that factors such as colocation of team members, team size, tenure or consensus-driven decision making were not important (although this may not be the case in other contexts).

 

10: How to Deliver Constructive Feedback in Difficult Situations

Writing in Medium, angel investor Dave Bailey provides an overview of the approach to communication outlined in Marshall Rosenberg’s ‘Nonviolent Communication’.

This is routed in the observation that people tend to avoid difficult conversations (which generally makes things worse) or else conduct them with too much empathy and thus fail to get their point across. Rosenberg’s approach, which is designed to help people be honest without criticising or insulting others, focuses on conveying an observation, feeling, need and request in the following pattern:

When ____[observation], I feel ____[emotion] because I’m needing some ____[universal needs]. Would you be able to ____[request]?

An example could be: ‘I haven’t received any responses from the last three monthly updates. I’m feeling concerned because I need input. Please, would you mind getting back to me with responses to my questions in the last update?’

While seemingly simple, this format follows a number of subtle but important principles:

  • It utilises observations rather than evaluations, referring to what actually happened (or was perceived to happen) rather than why (e.g. ‘you didn’t do it’ instead of ‘you are lazy’).
  • It expresses emotions rather than thoughts. People often convey thoughts as feelings (e.g. ‘I feel you aren’t taking this seriously’ versus ‘I feel frustrated’) but thoughts are more open to challenge and more likely to cause people to respond defensively.
  • It emphasises ‘universal needs’ rather than the strategies employed to meet them. An underlying assumption is that all people share a set of ‘universal needs’ and employ numerous strategies to meet these, with emotions arising when they fail to do so. By conveying a universal need rather than focusing on a strategy to achieve it, a message is less likely to be met with defensiveness or perceived as a veiled accusation (e.g. ‘I need support’ instead of ‘I need support from you’).
  • It makes a request rather than a demand. Both are routes to meet an unmet need, but requests recognise that potential conflict may be present and invite exploration of win-win solutions when this is the case (e.g. ‘Can you get this to me be tomorrow’ instead of ‘get this to me by tomorrow’). Requests should be specific (spelling out behaviours) and convey what is wanted rather than what is not wanted.

Rosenberg offers a number of additional guidelines on how to implement the approach:

The observation / feelings / needs should be captured in 40 words or fewer – using any more conveys a feeling that they are being justified and diminishes their impact. There can be a difference between what is said and what is heard, so it can be useful to check that there is a shared understanding before ending the conversation. Any difficult conversations should be held face-to-face.

Even well-crafted requests can be met with resistance – in such situations, trying to empathise with the other person is typically far more effective than insisting or trying to convince them. To do this, simply ask questions and listen carefully to the responses, in order to identify what is truly behind an inability to meet the request.

Where no agreement can be reached, set boundaries and outline the consequences of them being crossed (e.g. ‘continued underperformance will result in your responsibilities being switched’). Any consequences should be designed to protect the needs of the person making the request rather than punish the other person.

As Bailey writes, ‘All this preparation for 30–40 words may sound like a lot of work. It is a lot of work. But the result is clear, concise and powerful. No naming and shaming. No waffling. Just clarity about what you’ve observed, how you feel about it, and what needs are not being met. And at the end, you have a clear, actionable request‘.

 

Other Interesting Things
  • Internet Archive: Explore more than 351 billion web pages saved over time.
  • Mate: A browser plugin designed to facilitate language learning while watching Netflix.

For any comments or questions, please feel free to contact me at info@1000insights.com. To have receive future posts by email, submit you details below:

Blog sign-up

For more of the same, view the previous newsletter here or the archive here.