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Monthly Reading, June 2022
Res Extensa #20 :: The importance of context, should you care about TAM as an early-stage company?, tools for thought, and Hyrum's Law
Tyler Cowen has written before about this maxim: that context is often a missing and underrated piece of what makes interactions challenging. Conversations, debates, business meetings, sales calls, even discussions with your significant other at home. We've all experienced the feeling that the other person isn't listening, or doesn't "get it” — but it could just be a sort of a Hanlon's razor-like situation; they aren't not-getting-it because they're rude or disrespectful, maybe they're missing the context that you have.
A great example of this idea is onboarding new employees to a team. It's typical to give a new team member a series of introduction meetings with various people, training on all the tools, and access to the right systems and documentation. But a piece often not explicitly handled is context-setting, giving new hires the why and how we got here aspects of the company. Capable and curious people are great at problem solving if they have solid context.
You also see this a lot in writing. The best authors balance depth on a topic with the proper context-setting (in few enough pages) to attract the widest comprehending audience possible.
Membership in networks of people provides context — an ever-expanding level of context the longer and deeper you're involved in a network:
Networks create context. Movement along the network to subcategories or adjacent networks creates new insights out of new context, and importantly the person retains an ability to engage with the old context, while inculturating himself to a broader view.
Startups spend too much time stewing over their addressable markets. Until you get pretty big, TAM just needs to be "big enough". And at seed or early stage, big enough is plenty. My friend Sandy Kory points out in this post that spending time coming up with complex TAM analysis is a poor use of your limited attention as a founder, and a too-early-to-know misdirection for early stage investors. More importantly, focus your time on building to customer problems:
For B2B software, there is no limit to the Jobs To Be Done. Product expansion is limited by imagination, not TAM. Once one task is automated there will always be another to automate. Once one bottleneck is solved, there will always be another that software can address.
Attention is your most valuable commodity at this stage when you're building a product. Spend it working with your customers, understanding Jobs to Be Done, and trying to build your bottoms-up growth machine.
If you're into the "tools for thought" scene, Andy Matuschak's work is among the most interesting on the topic. We're about seven or eight decades into the era of the human-computer interface, and still have barely scratched the surface on maximizing the potential of machines to augment our thinking. In this piece Andy looks at the space through the lens of science, craft, art, and design.
On TfT and craftsmanship:
Another reason the craftsmanship impulse is useful is that many insights are only reachable if users make a system a part of their lives, if they use it to do something that really matters to them. No one wants to use a piece of junk for anything important. So a finely honed system has the potential to involve more real people in real situations, and therefore to produce more insight.
If you've built anything that's scaled up to a substantial number of regular users, you'll have sympathy for Hyrum's Law, which reads:
With a sufficient number of users of an API,
it does not matter what you promise in the contract:
all observable behaviors of your system
will be depended on by somebody.
This is of courses written in the context of software APIs, but it largely holds true when you make any product. Even physical products have "interfaces" that'll get used and abused in an expansive number of ways.
A product with millions of users generates an enormous number of distinct uses, like any complex system with many downstream interconnected parts.
A Few Podcasts Worth Your Time
This month I wanted to share a few recent listens worth checking out.
Daniel and Tyler have a new book out appropriately called Talent, about their experiences in what it takes to identify great talent that might be missed by conventional wisdom. Daniel runs a venture fund called Pioneer, which runs competitions looking for creative, entrepreneurial talent worldwide. Similarly Tyler runs Emergent Ventures, out there on the hunt for unnoticed talent to fund with fellowships and grants. It's a great conversation on some of the unique perspectives they have in their collective thousands of job interviews and recruitment processes.
Joel Mokyr is an economic historian that's written extensively on the roots of the Industrial Revolution and scientific progress. This interview gives a solid primer on his work. He's a techno-optimist and a proponent of "dynamism" — that one of the central sources of progress in the West was openness to experimentation, embrace of the new, and a resistance to complacency and stasis.
Strong incentives to innovation in Western culture have been pivotal to the growth we've seen since the late 1700s. Autocratic, closed societies don't create incentives — or at least they interfere with incentives to try and manipulate outcomes. Here's Mokyr on incentives:
I think the West has basically come up with the only political model that truly works, which is essentially, "let 100 flowers bloom", as Mao Zedong said but never did. But we did it in the West. It was his metaphor, and I think it's worked really well for us basically since the 18th century. People basically took a view of go ahead if you have a good idea, try it out, and let's see what happens. And the other thing that we do really well, I think, in the Western world is create incentives.
Economics is all about incentives. You really expect people to respond to rewards and to penalties in what they do. This is in a way a Western invention that came out in the 17th and 18th century, and it's much of my *Culture of Growth* book is about that. We do reward people for having good ideas. Even so ideas really can't be made property, right? Isaac Newton, to come up with just the most striking example, or say Einstein, somebody like that, I mean, clearly they're not going to capture the rents that their ideas suggest for the economy at large. But we can make them famous, we can give them a Nobel prize.
Stephen Kotkin on Putin, Stalin, Zelenskyy, and the War in Ukraine
Stephen Kotkin is one of my favorites. If you want to learn about the history of Russia, Communism, totalitarianism, or any related subject, he's the most deep and articulate speaker you'll find. Most of this interview is on Putin's situation and the Ukraine War, on which Kotkin has appropriately complex views. Too many reactions in the media fall on the extremes: "Putin is justified in his actions" or direct action in support of Ukraine. I bias toward the latter, but the whole thing is unfortunate and complicated.