For years, I've been opposed to athletic recruiting at elite academic institutions; it seems obvious to me that athletic accomplishment is but one factor that should be considered individually and in the process of building out a well-rounded student body. In particular, the prioritization of athletics over artistic, musical, and scientific excellence during the university recruiting process has always struck me as a quirk of history.
This quirk of history recently made the national news when investigators discovered that certain coaches were taking bribes from wealthy parents in order to push students through the recruiting process.
What confuses me isn't that this happened, but that university leadership didn't take this opportunity to modernize the system. This would have been the perfect catalyst to take a national stand and act with courage and intellectual fortitude in order to attempt to switch the Ivy League from Division I to Division III, or to remove itself from the NCAA entirely. Instead, university leaders took the path of least resistance, instituting minor and insignificant policy changes which do nothing to address the root cause of the problem: allowing college admissions to be warped by the need to recruit athlete-students rather than student-athletes.
Sunday, October 20, 2019
Thursday, October 3, 2019
Cyberwar and the Economic Battlespace
Note that cyberwar for the purposes of this essay is meant to refer to mechanisms of conflict that are fundamentally oriented around gaining access to siloed intellectual property, rather than the conventional definition which is more expansive and includes political manipulation and the targeting of traditional military target with cyber-weaponry, sometimes resulting in the destruction of physical property.
As an increasing amount of aggregate global value comes from intangible, non-traditional assets such as human capital and intellectual property, and as the relative value of raw materials and commodities decreases, modern nation states face a new competitive landscape. In particular, while historical conflict was zero sum as a result of finite amounts of geographic space and the fixed resources contained within a given border, modern conflict also involves attempts to develop, destroy or redistribute these more abstract resources.
These abstract resources have a number of attributes which make them challenging to think about without updating our fundamental assumptions which underpin many classical theories of conflict. This essay focuses on the conflict over intellectual property, but I believe that conflict over human capital is equally fascinating given trends towards specialization and a much wider distribution of human capital across the population.
Intellectual property has long been a challenging type of capital to protect; the asymmetry between the high cost of developing new technology and the relatively low cost of deploying existing technology makes it a tempting target for competitors. If achievable, acquiring access to technology without bearing the development costs is a strong strategy.
Further, unlike in a traditional conflict, transferring technology between combatants does not harm either entity on an absolute basis: technology transfer eliminates the profit that can be extracted by producers of the technology, but the intrinsic value is often increased, and always conserved.
In these terms, belligerents in cyberwar could be considered as fundamentally moral from the perspective of a finite game: by stealing proprietary property and releasing it publicly, access to that technology would become broader, increasing the amount of value in the world.
At the limit, as the share of "abstract value" created by access to new technology increased relative to the share of "raw value" defined by access to physical materials, it would be theoretically possible to completely redistribute value across the population, resulting in a non-violent Marxist equilibrium ("from each according to his ability to each according to his need").
However, from a capitalist's perspective, this equilibrium would also signify the end of progress. If the only way to create new value is through developing new technology, and the pervasive theft of intellectual property decimates the return on capital that a private entity can expect to obtain from the development of new technology, markets will no longer be able to function to fund and develop new technology, and this equilibrium will represent a pyrrhic victory. Without the ability to fund innovation in present by relying on proceeds from the future, technology would stagnate and one of our most unique assets as a species (the ability to shape our own evolution) would be destroyed.
As such, cyberwar represents a fundamental battle between socialist and capitalist values: if you believe that technology development would occur at the same rate without market incentives, it is fundamentally moral to redistribute it as soon as its developed. If, on the other hand, you take the other side, and especially you believe in non-linear compounding growth of knowledge and technology, this equilibration is likely the single greatest threat to progress for our species, and you should probably take up arms in this quintessentially modern form of battle.
The good news, though, is that once we start fighting over abstract goods, with abstract weapons, in abstract spaces, the only true harm that is possible in the present is relative, which means that even the price of conflict is fundamentally abstract and requires discounting into future.
And how fun is that!
As an increasing amount of aggregate global value comes from intangible, non-traditional assets such as human capital and intellectual property, and as the relative value of raw materials and commodities decreases, modern nation states face a new competitive landscape. In particular, while historical conflict was zero sum as a result of finite amounts of geographic space and the fixed resources contained within a given border, modern conflict also involves attempts to develop, destroy or redistribute these more abstract resources.
These abstract resources have a number of attributes which make them challenging to think about without updating our fundamental assumptions which underpin many classical theories of conflict. This essay focuses on the conflict over intellectual property, but I believe that conflict over human capital is equally fascinating given trends towards specialization and a much wider distribution of human capital across the population.
Intellectual property has long been a challenging type of capital to protect; the asymmetry between the high cost of developing new technology and the relatively low cost of deploying existing technology makes it a tempting target for competitors. If achievable, acquiring access to technology without bearing the development costs is a strong strategy.
Further, unlike in a traditional conflict, transferring technology between combatants does not harm either entity on an absolute basis: technology transfer eliminates the profit that can be extracted by producers of the technology, but the intrinsic value is often increased, and always conserved.
In these terms, belligerents in cyberwar could be considered as fundamentally moral from the perspective of a finite game: by stealing proprietary property and releasing it publicly, access to that technology would become broader, increasing the amount of value in the world.
At the limit, as the share of "abstract value" created by access to new technology increased relative to the share of "raw value" defined by access to physical materials, it would be theoretically possible to completely redistribute value across the population, resulting in a non-violent Marxist equilibrium ("from each according to his ability to each according to his need").
However, from a capitalist's perspective, this equilibrium would also signify the end of progress. If the only way to create new value is through developing new technology, and the pervasive theft of intellectual property decimates the return on capital that a private entity can expect to obtain from the development of new technology, markets will no longer be able to function to fund and develop new technology, and this equilibrium will represent a pyrrhic victory. Without the ability to fund innovation in present by relying on proceeds from the future, technology would stagnate and one of our most unique assets as a species (the ability to shape our own evolution) would be destroyed.
As such, cyberwar represents a fundamental battle between socialist and capitalist values: if you believe that technology development would occur at the same rate without market incentives, it is fundamentally moral to redistribute it as soon as its developed. If, on the other hand, you take the other side, and especially you believe in non-linear compounding growth of knowledge and technology, this equilibration is likely the single greatest threat to progress for our species, and you should probably take up arms in this quintessentially modern form of battle.
The good news, though, is that once we start fighting over abstract goods, with abstract weapons, in abstract spaces, the only true harm that is possible in the present is relative, which means that even the price of conflict is fundamentally abstract and requires discounting into future.
And how fun is that!
Saturday, July 13, 2019
Model-driven Product Management
Towards the end of 2018, I found myself struggling with the new demands of my job - for the past four years, I had been operating in a relatively simple world with a single major customer and a relatively small engineering team (~25 engineers).
Six months earlier, I had started leading product management for a bigger team with ~100 major customers and ~200 engineers. While I felt like we had been doing an okay job and were prioritizing the right things, I knew we could do a lot better. Additionally, at this scale, it was becoming difficult to communicate how the prioritization process worked.
So over the past few months, I've been thinking about how to build a loosely-democratic technocratic and believability-oriented system for deciding which projects to prioritize over time.
Note that this system may not be ideal for other organizations or other product managers: I'm a hybrid Business / Technical Product Manager per Stripe's description, and so it's clearly biased by those perspectives. Our operating environment is also probably pretty different than most -- it's characterized by a substantial disconnect between users and payers, which leads to a lot of indirection between value creation and value capture, large per-client integration teams, which leads to indirection between user feedback and the product team, and very discontinuous revenue growth given the relatively small number of large scale (~1m ARR) customers.
Effectively, there are two models, a cost-oriented model which is driven primarily by engineering, and a value-oriented model which is driven primarily by sales. The goal of the system is to order a list of projects by their business value, and then achieve maximum throughput and long-term velocity from the engineering team against those projects.
A visualization of the current value model is represented in this prioritization matrix:
On the cost side, the projects are arranged in a dependency graph modeled after the concept of a tech tree, a game mechanic common in many strategy games. Currently, dependencies are firm, though in the future, I've considered adding additional bonuses and soft dependencies to better express the distinction between MUST and SHOULD dependencies. This graph is expressed as a DOT file, which produces an intuitive visualization, with green nodes representing active projects, grey nodes representing completed projects, and yellow nodes representing available projects. Each project is given a rough cost (using a rough fibonacci scale).
A visualization of the current cost model is represented in this dependency graph:
Then, the value vector is applied to the graph, and value is propagated through the dependencies to sort all of the available projects (projects where all of the dependencies are either active or completed). I've played around with various algorithms - the one I was happiest with is one that rolls the value back to all parents equally rather than splitting it, and which doesn't dissipate. This seems to result in the the most intuitive ranking, but without distinguishing between must / should dependencies, it can end up overvaluing infrastructure projects - dissipation can help with this at the cost of losing expressivity in very deep trees.
So the result is a series of value vectors for the projects:
- Vectors representing the votes from each individual account
- A vector which represents the business' strategic weights applied to the per-account votes
- A graph-propagated value vector that takes into account engineering cost and cross-project dependencies.
Having these three vectors makes it really easy to talk with a wide array of stakeholders across the company, and have made it a lot easier to discuss why we're doing what we're doing across the company. Additionally, when the graph vector gets wildly out of order versus the business vector, we can look hard at the graph to try and figure out cleverer paths to get to the value more cheaply.
Additionally, for staffing, I've found found that people tend to find it meaningful to flow through the graph: each project moves naturally into the next project, creating a strong professional growth narrative and helping project teams retain context and mentor new teammates.
More than anything, the model is transparent - we spend a lot more time talking about the inputs and the framework rather than the outputs, yielding much more substantive conversations.
Some limitations of the model that I'd like to fix:
- Doesn't take into account constellation building and project complexity. I've considered adding a complexity metric to enumerate projects which need a delicate and fragile constellation of team members in place to ensure success.
- This model doesn't express time value or cost of delay particularly well and is best suited for peacetime rather than a wartime.
- Most people don't understand it - there's a fundamental tension between accuracy, legibility and simplicity, and I probably could have made it simpler, but I opted towards a more accurate less immediately legible model in order to express the factors I found most critical.
Thursday, January 3, 2019
My favorite books from 2018
This year, questions of authoritarian ideologies, the wider arcs of history, and the pursuit of innovation drove my reading. In that vein, I think that my favorite books of the year reflected those themes. Also, it seems like i need to read more fiction perhaps...
1. Our Kindly Inquisitors
Written in the middle of the culture wars in 1993, this is a must-read for anyone engaging in or struggling with modern identity politics. Even if you disagree fundamentally with parts of this book, you should read it. Ostensively about free speech, the book is probably more appropriately viewed through an epistemic lens, with Rauch viewing epistemology as deeply intertwined with politics. His crisp language cuts deeply at the core of questions that remain relevant to this day: does the identity of a speaker tarnish the validity of that speech? How do we maintain our right to fight against ideas we find repugnant without suppression and censorship? Who has the right to bless speech, and with it, the ideas that we find acceptable in polite society?
2. Deng Xiaoping and the Transformation of Modern China
It's not an exaggeration to claim that Deng Xiaoping was the single most influential person in the 20th century - it might not be right, but it's defensible. Deng had an impact on the scale of FDR, Hitler Churchill, Khrushchev and Kennedy. The difference is, Americans don't know anything about Deng. Anyone looking to understand modern China and "socialism with Chinese characteristics" should read this book, as should anyone trying to make big, sweeping societal changes. While not perfect, Deng is appropriately viewed by many Chinese as the founder of modern china, his leadership took a country that had a lower per-capita GDP than North Korea into the modern economy and began the process of healing from the Cultural Revolution.
3. Wild Swans
As a foil to my flirtation with Deng Xiaoping, Wilds Swans is a memoir that centers on the Cultural Revolution and the atrocities that happened under the Communist Party in the middle of the 20th century. Banned since publication in her native China, Chang's prose tells the story of three generations of women before and during the Communist's rise to power and presents the chilling reality of the Cultural Revolution from the perspective of a young woman growing up in a deeply unstable world. One thing stuck with me from this book: there was no KGB or Gestapo during the Cultural Revolution - in China, it was the entirety of the population that terrorized one another in a gruesome perversion of Marxist ideology.
4. The Idea Factory
If I had to go back in time, I would go back to Bell Labs and apply for a job. This book explains why. Bell Labs was a powerhouse of innovation - it's hard to find an example of modern technology that doesn't trace back to its hallowed halls. Somehow, under the monopoly of 'Ma Bell, a small research lab in New Jersey attracted some of the most talented scientists and engineers in history: nine Nobel Prizes were granted for the work done at Bell Labs. In fact, this year's Nobel Prize was won for research that was done in Bell Labs during the 1970s and 1980s. This book made me think a lot about the fundamentally inegalitarian world of innovation. Were the people at Bell Labs substantively better than anyone else in the world at what they were doing? The answer is an unqualified yes. Together, they were responsible for more innovation than any similarly sized group of people had any right to be. Interestingly, these researchers did not get rich. They were, of course, well off. But they were motivated by research and by discovery, not by money. Can we have such researchers today, in a neoliberal world dominated by high-paying jobs optimizing the existing world? Or was it a unique confluence of circumstances that led this group of humans to invent our modern world?
5. The Lessons of History
Written by Will and Ariel Durant, this is at once an optimistic and tragic story. The premise is ambitious: to summarize the main lessons and themes from the Durant's life's work, their 10-volume, 10,000 page opus "The Story Of Civilization," and remarkably, it succeeds. The book is structured as a collection of short essays, and the fundamental thesis, that we are more similar to our forebears than we might realize and that we have transcended the world of individual Darwinian competition and earned the right to evolve as a civilization rather than as a species is a compelling way to think about our role in history.
1. Our Kindly Inquisitors
Written in the middle of the culture wars in 1993, this is a must-read for anyone engaging in or struggling with modern identity politics. Even if you disagree fundamentally with parts of this book, you should read it. Ostensively about free speech, the book is probably more appropriately viewed through an epistemic lens, with Rauch viewing epistemology as deeply intertwined with politics. His crisp language cuts deeply at the core of questions that remain relevant to this day: does the identity of a speaker tarnish the validity of that speech? How do we maintain our right to fight against ideas we find repugnant without suppression and censorship? Who has the right to bless speech, and with it, the ideas that we find acceptable in polite society?
2. Deng Xiaoping and the Transformation of Modern China
It's not an exaggeration to claim that Deng Xiaoping was the single most influential person in the 20th century - it might not be right, but it's defensible. Deng had an impact on the scale of FDR, Hitler Churchill, Khrushchev and Kennedy. The difference is, Americans don't know anything about Deng. Anyone looking to understand modern China and "socialism with Chinese characteristics" should read this book, as should anyone trying to make big, sweeping societal changes. While not perfect, Deng is appropriately viewed by many Chinese as the founder of modern china, his leadership took a country that had a lower per-capita GDP than North Korea into the modern economy and began the process of healing from the Cultural Revolution.
3. Wild Swans
As a foil to my flirtation with Deng Xiaoping, Wilds Swans is a memoir that centers on the Cultural Revolution and the atrocities that happened under the Communist Party in the middle of the 20th century. Banned since publication in her native China, Chang's prose tells the story of three generations of women before and during the Communist's rise to power and presents the chilling reality of the Cultural Revolution from the perspective of a young woman growing up in a deeply unstable world. One thing stuck with me from this book: there was no KGB or Gestapo during the Cultural Revolution - in China, it was the entirety of the population that terrorized one another in a gruesome perversion of Marxist ideology.
4. The Idea Factory
If I had to go back in time, I would go back to Bell Labs and apply for a job. This book explains why. Bell Labs was a powerhouse of innovation - it's hard to find an example of modern technology that doesn't trace back to its hallowed halls. Somehow, under the monopoly of 'Ma Bell, a small research lab in New Jersey attracted some of the most talented scientists and engineers in history: nine Nobel Prizes were granted for the work done at Bell Labs. In fact, this year's Nobel Prize was won for research that was done in Bell Labs during the 1970s and 1980s. This book made me think a lot about the fundamentally inegalitarian world of innovation. Were the people at Bell Labs substantively better than anyone else in the world at what they were doing? The answer is an unqualified yes. Together, they were responsible for more innovation than any similarly sized group of people had any right to be. Interestingly, these researchers did not get rich. They were, of course, well off. But they were motivated by research and by discovery, not by money. Can we have such researchers today, in a neoliberal world dominated by high-paying jobs optimizing the existing world? Or was it a unique confluence of circumstances that led this group of humans to invent our modern world?
5. The Lessons of History
Written by Will and Ariel Durant, this is at once an optimistic and tragic story. The premise is ambitious: to summarize the main lessons and themes from the Durant's life's work, their 10-volume, 10,000 page opus "The Story Of Civilization," and remarkably, it succeeds. The book is structured as a collection of short essays, and the fundamental thesis, that we are more similar to our forebears than we might realize and that we have transcended the world of individual Darwinian competition and earned the right to evolve as a civilization rather than as a species is a compelling way to think about our role in history.
Sunday, July 15, 2018
Using Continuous Deployment to Drive Azure Footprint
About a month ago, Microsoft acquired Github for $7.5B, with the clear goal of driving developer engagement and beginning the long path towards rebuilding its relationship with a new generation of developers. While I appreciated Ben's perspective, I think that there remains another vector for growth that was conspicuously missing from his initial post: leveraging the Github developer base to tilt the scale away from AWS towards Azure for new projects and companies.
Building a new software company in 2018 involves a number of concrete engineering decisions that happen early on in company formation:
Building a new software company in 2018 involves a number of concrete engineering decisions that happen early on in company formation:
- Where should we host our code to begin development?
- Which frontend platform / language should we use (iOS, Android, Web, Native Desktop)?
- Which baseline services (databases, authentication providers, analytics, payment processing) should we orient around?
- Which cloud provider should we run everything on?
Historically, Microsoft had strong moat-enforcing solutions for every one of these questions; more recently, their solutions have been subject to increasing competition from third-party competitors. Additionally, as interoperability at the service layer (Microsoft's traditional strength) has increased competition and lowering the barrier for individual companies to build deep offerings in a specific segment of the service space (e.g. Okta in Auth), it seems like the critical question for Microsoft has to be how to drive organic Azure growth.
On the surface, building a new product or company is easier than ever - make an organization in Github, create a couple repositories (or one, looking at you monorepo folks) for your application and backend persistence layer, write some code, build a container and deploy it to AWS.
In practice, the actualization of this process remains a serious challenge to manage. Especially during the growth phase of a new company, maintaining quality and velocity is a non-trivial challenges. Writing and running tests, drafting and approving releases, phased deployment, zero-downtime schema migrations, and beta-testing new versions of a product is still a dark art that requires patching together a wide set of open-source and proprietary toolchains.
Enter Github and Azure. The Github acquisition is the best opportunity for Microsoft to intercept new projects and companies before they release their first version to production, changing the default assumption. Almost definitionally, companies start writing code in Github before they start renting servers on AWS. As such, Github offers a brilliant wedge into the earliest phase off company formation, the largest existential threat facing Azure.
With a relatively simple toolchain for continuous deployment (augmented by a targeted M&A buying spree), I suspect that Microsoft should be able to convince Github developers that Azure is the best place to run their tests, compile their software, build their containers, and, most critically, deploy their applications to production on Azure.
This shift would be a total revitalization of Microsoft's cloud infrastructure, and would shift the balance of power between the cloud companies and heighten competition between the two behemoths in Washington. Also, as an engineer myself, I'm excited to see what a company who has focused so much on developers for the vast percentage of its history might do to the modern world of building incredibly complex cloud-based applications. Indeed, while I'm not making any bets on this path, winning developers in the cloud might also offer the best path towards reclaiming developers on Windows, thus extending and deepening the Windows moat by allowing native OS-level integration with Azure-based build systems and test infrastructure to reduce the burden on a local workstation.
Wednesday, January 3, 2018
My favorite books from 2017
I started 2017 with the goal of reading more about neoliberalism. Donald Trump had just been elected, and George Packer's The Unwinding was ricocheting through my head.
But actually, looking back, I didn't really touch neoliberalism at all. Instead, 2017 was primarily a year dominated by a deeper inspection of the Soviet Union, centralized planning, and the tension between nature, nurture, and society. So, without further ado, my top five books of 2017.
1. Life and Fate
I remember exactly when I first heard about Life and Faith. It was summer in New York, and I was running on the West Side Highway listening to Invest Like the Best, one of my favorite podcasts. The host and guests tend to spend a lot of time talking about what they're reading and learning, and for whatever reason, the guest that day decided to mention this completely undiscovered classic of Russian Literature. They way he talked about the book, well, I guess it's the way that I talk about it too. I don't know exactly why it stuck with me, or what made it so compelling, but I find myself coming back to it almost every week, thinking about the characters and the writer.
In any case, reading an unheard-of 900-page Soviet book on a whim was a weird decision that could have gone terribly poorly. I need to revisit the book and write a more comprehensive review, and I'll do that sometime later, but in the meantime, anyone who wants to hear more should just ask me directly; I don't think I'll ever get tired of talking about this book.
2. Secondhand Time
I found this book on a balcony, talking about Life and Fate with a brilliant fellow reader. It's a stunning non-fiction book that won the 2015 Nobel Prize in Literature. Set in the years leading up to and following the fall of the Soviet Union, it's a beautiful piece of literature that challenges the simplistic American perspective on Russia and the end of the Cold War.
3. The Gene: An Intimate History
I remain convinced that genetics is one of the most challenging areas for modern human morality - we are all different, and how we deal with these differences is going to be the seminal challenge in bioethics and politics over the coming decades. This book is a quick, well-written history of genetics, that concludes with some of the most challenging questions that we have in front of us: What is natural in a world of genetic engineering? Are we prepared to deal with the moral implications of the things we may learn over the coming decades? What happens if we learn things that are true but distasteful?
4. The Three Body Problem
Others have summarized this better than me, but this is the seminal piece of science fiction from the past few years. It's stunningly creative, and interestingly foreign; written by a Chinese author, it's a very different style, with a sweeping perspective that slowly zooms out from micro to macro over the course of the book.
5. Seeing Like a State
The seminal "libertarian-leftist" bible, Seeing like a state is a full-throated rebuttal to centralized control and utopian projects. This is a book that everyone in a particular cluster of society has read, but no one else have ever touched. Overall, the book explores themes of legibility and control, and explores a thesis that increasing legibility often fails to acknowledge its fundamental hubris and has historically failed to build in enough buffer for the "unknown unknowns" that eventually doom its projects. If every art becomes a science, Scott writes a cautionary tale for the scientists of the world: especially in complex systems, the arts can sometimes be imbued with tribal knowledge which the science must appreciate to succeed.
But actually, looking back, I didn't really touch neoliberalism at all. Instead, 2017 was primarily a year dominated by a deeper inspection of the Soviet Union, centralized planning, and the tension between nature, nurture, and society. So, without further ado, my top five books of 2017.
1. Life and Fate
I remember exactly when I first heard about Life and Faith. It was summer in New York, and I was running on the West Side Highway listening to Invest Like the Best, one of my favorite podcasts. The host and guests tend to spend a lot of time talking about what they're reading and learning, and for whatever reason, the guest that day decided to mention this completely undiscovered classic of Russian Literature. They way he talked about the book, well, I guess it's the way that I talk about it too. I don't know exactly why it stuck with me, or what made it so compelling, but I find myself coming back to it almost every week, thinking about the characters and the writer.
In any case, reading an unheard-of 900-page Soviet book on a whim was a weird decision that could have gone terribly poorly. I need to revisit the book and write a more comprehensive review, and I'll do that sometime later, but in the meantime, anyone who wants to hear more should just ask me directly; I don't think I'll ever get tired of talking about this book.
2. Secondhand Time
I found this book on a balcony, talking about Life and Fate with a brilliant fellow reader. It's a stunning non-fiction book that won the 2015 Nobel Prize in Literature. Set in the years leading up to and following the fall of the Soviet Union, it's a beautiful piece of literature that challenges the simplistic American perspective on Russia and the end of the Cold War.
3. The Gene: An Intimate History
I remain convinced that genetics is one of the most challenging areas for modern human morality - we are all different, and how we deal with these differences is going to be the seminal challenge in bioethics and politics over the coming decades. This book is a quick, well-written history of genetics, that concludes with some of the most challenging questions that we have in front of us: What is natural in a world of genetic engineering? Are we prepared to deal with the moral implications of the things we may learn over the coming decades? What happens if we learn things that are true but distasteful?
4. The Three Body Problem
Others have summarized this better than me, but this is the seminal piece of science fiction from the past few years. It's stunningly creative, and interestingly foreign; written by a Chinese author, it's a very different style, with a sweeping perspective that slowly zooms out from micro to macro over the course of the book.
5. Seeing Like a State
The seminal "libertarian-leftist" bible, Seeing like a state is a full-throated rebuttal to centralized control and utopian projects. This is a book that everyone in a particular cluster of society has read, but no one else have ever touched. Overall, the book explores themes of legibility and control, and explores a thesis that increasing legibility often fails to acknowledge its fundamental hubris and has historically failed to build in enough buffer for the "unknown unknowns" that eventually doom its projects. If every art becomes a science, Scott writes a cautionary tale for the scientists of the world: especially in complex systems, the arts can sometimes be imbued with tribal knowledge which the science must appreciate to succeed.
Tuesday, September 22, 2015
Products or: How I Learned to Start Worrying and Fear the Services
Within tech, I've constantly been surprised by the religiosity surrounding product development. For a long time, I didn't understand it. In fact, it wasn't clear to me why selling products was strictly better than selling services. My career started at a company that provided a fusion of products and services, as many large enterprsie software companies do, and especially when I started at the company, it wasn't clear why providing products was such a focus for the company. In fact, when I joined, it was very stressful to be on the product development side of the organization - things seemed decidedly murkier when trying to build products than when trying to fulfill contracts.
However, there are a number of reasons that traditional product companies are so desirable. Some of these are purely financial - product companies have a much higher capacity to generate profits than other companies. Others are, however, much more cultural. Product companies bind groups of people together with an evangelical furor that rivals some of the worlds most popular religions, provide clear focus as a company grows, and allow people to concretely see what an organizations does.
I remember very clearly the first time I talked about the value of product development with my boss in 2014. I was working on a failing product at the time, and felt dejected about our lack of progress. We had worked hard, but the product we had built was useless. It wasn't because we had failed to build something, but rather because we had built the wrong thing. As a product manager at the time, the responsibility for this directional failure was mine, and I was frustrated and asked him why we focused on products when the expected return on services felt so much higher. His response stuck with me, and focused on three main components.
Firstly, product development has a much higher failure rate than providing business services. Most product development efforts fail, and many of them fail spectacuraly. However, this failure rate still doesn't change the fact that the expected value of product development is almost always higher than providing raw professional services. Despite the extraoridinarly high rate of failure, successful products are incredibly valuable, and therefore often dominate any rudimentary expected value calculation.
This value comes from a combination of two traits, which I call horizontal and vertical. Horizontal value comes from a product's ability to increase efficiency. These type of products help businesses do the same thing that they've always done, but faster. This, in turn, reduces the cost of revenue, and allows the business to generate more revenue with the same number of people. Vertical products, by contrast, open new lines of business - they allow companies to increase their top-line revenue numbers. In this model, Ads at Facebook would be a vertical product while the HipHop Virtual machine, would be a horizontal product.
In either case, though, products produce lasting results; once developed, they can continue to provide value for years either by reducing expenses or increasing revenue. This, in turn, makes them assets for the company despite not requiring additional investment.
So from a financial perspective, product development is essential. In the next post, I'll spend some time talking about some of the other ways that products can provide value.
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