The Network Garden - Mark Sigal's Blog

Seven reasons I am betting on a Soft Landing for the U.S. Economy

Famed investor Michael Burry ('The Big Short') predicts a U.S. recession "by any definition.” That sounds ominous but let me attempt to articulate why I believe a soft landing or mild recession is more likely.

First and foremost, two disclaimers. One, I am not smart enough to predict the gyrations of the stock market, which is digesting the unwinding of one of the greatest asset bubbles ever, coupled with a still-lingering pandemic, an emerging climate crisis, and international & domestic political instability.

 

That’s a lot of risk to mitigate.

Two, we ARE moving into a period of tighter access to capital, so industries dependent on cheap, easy money to backstop long-term negative cashflow business fundamentals, or robust public markets for ready liquidity (e.g., Venture Capital) may very well face serious challenges.

In a healthy way, the present is very much a time for re-set of valuation metrics, and re-classification of assets, as in:

1. Is that asset really a liability?
2. Is the valuation premium too rich given risk factors (think: Crypto, Tesla)?

In other words, if you are in an undifferentiated money-losing business (or industry), the present time is reminiscent of the narrative that:

“When your friend loses her job, it's a recession, but when YOU lose your job, it's a depression.”

The point being that not all segments are created equal, and even in good economic times, plenty of businesses fail.

Then, why am I relatively bullish?

One, so much of inflation, and by extension, the cost of EVERYTHING, is driven by energy costs, which anyone who has gone to the pump recently can see has fallen by 35% since its peak in June.

Equally important, the economy seems to have weathered the initial shocks created by Russia’s invasion of Ukraine.

Two, consumers remain relatively flush, having built up reserves during the pandemic, driven by stimulus, a strong job market, and deferred spend on luxury items and travel.

Three, the job market remains very strong, and unemployment remains low.

One impact of that is the durability of brick and mortar retail.

My company, Datex Property Solutions, tracks the rent collections and sales data of thousands of shopping centers and tens of thousands of retailers nationwide, and while individual retail categories and specific operators are always at risk of getting “Amazon’d,” the actual data remains strong.

We have seen no material weakening of retail sales and/or rent collections, based on highly validated data that goes back from pre-pandemic to the present.

Four, while companies are preemptively laying off workers, the fact is that corporate profits have been off the charts strong, so self-interest suggests they won't over-cut, and in the case of the tech sector, much of the cutting is driven by over-staffing based on the last cycle’s ethos of growth at all costs.

Five, let's not forget the impact of tech in non-tech industries, sometimes referred to as "software is eating the world."

As the crash and burn of Southwest Airlines over the holiday underscores, much of corporate America and most SMB's are relatively early in their adoption of tech-powered innovation, be it better data to make smarter decisions, or automation to drive better process and improved productivity.

Plus, we are just now seeing the realization of the promise of artificial intelligence, which is ready to transform the way companies operate in the same way personal computing, the internet and mobile transformed our economy.

The difference between when those technology waves kicked in, and now, is that much of the technology adoption lifecycle is at the “applied” phase.

This means that technology is reaching a point of maturity that given a dollar of investment, the return on effort, spend and human capital is much clearer and with a much shorter ramp.

The point here is that unlike the stagflation period of the 1970s, which I grew up in, when American innovation felt dead, our ability to innovate and APPLY innovation to better operations is very strong.

Six, the pandemic and global politics have awakened the notion that the best way to mitigate bottlenecks in the supply chain is to (re)build manufacturing domestically.

This feels like 5-10 year trend that is only accelerating.

Seven, with a tightening of the economy comes a healthy revisiting of the question of Work From Home vs. Work From Office, and the bet here is that while the right answer is a hybrid of both, the tilt will shift back towards Work From Office, which will provide needed oxygen to many a beleaguered business district, and the ecosystem that services it.

To be clear, no one holds the crystal ball, and ultimately, scenario planning is about assessing probabilities based on catalysts, constraints and other human factors, but from where I sit, I am more optimistic (than not) about the outlook for the year ahead.

Reasons for Optimism, and The Honest Liar has No Sense of Decency

The 2022 Midterms may ultimately mean a lot, or very little, in terms of the durability of Democracy and a broadening of personal freedoms.

But, it certainly felt like a turning point in the right direction.

Away from cynicism and disregard for our history and institutions.

Towards optimism, affirmation in the importance of good (and getting better) governance, the integral-ness of functioning institutions, rule of law and the belief that Policy can make a difference in people's lives...for the better.

The Good Liar 

Comedian Dave Chappelle had a very astute observation in his recent opening monologue on SNL.

When talking about the appeal of Donald Trump, Chappelle spoke with absolute clarity.

The genius of Trump, Chappelle noted, is that Trump is an "honest liar."

He channels our cynicism by treating lying, cheating, stealing and self-dealing NOT as a sign of moral failure or guilt, but rather, of virtue, a sign of personal force and of being a GANGSTA (not gangster), by reverse engineering the system.

Breaking the rules and being bound by no truths other than, "When you are a star, they let you do it," Trump as the honest liar is the hero to the cynics, who believe that:

1. The system is irrevocably broken
2. Those empowered to govern are irredeemably corrupt
3. Our institutions are fundamentally incapable of making peoples lives better, if they ever did

In such a world, the liar and cheat, the honest liar is King.

(As an aside, what I love about Chappelle is that he has no sacred cows. He is an equal opportunity offender, but not simply a cheap shot artist; he gets to the subtext of situations, the elephant in the room that no one talks about. Comedy is afforded license to make us uncomfortable.)

"Have you no sense of decency, sir, at long last?"

But, the dark charm of the honest liar begs a question.

Where does this all end? Insurrection? Election denial? Stealing confidential documents? Collusion with historical foes, like Putin's Russia?

Or, to put it all in perspective of history, in the early 1950's, Joseph McCarthy, a Republican U.S. Senator from Wisconsin, used his position of power to create a witch hunt around surfacing Communist sympathizers, a witch hunt that literally destroyed hundreds, if not thousands of lives.

The term "McCarthyism", coined in 1950 in reference to McCarthy's practices, came to more broadly mean demagogic, reckless, and unsubstantiated accusations, as well as public attacks on the character or patriotism of political opponents.

McCarthy's actions ran rampant because everyone feared being deemed anti-American in the time of the Cold War.

McCarthy's fall came when after turning his attentions to the United States Army, its chief counsel Joseph Welch, called truth to injustice, "You've done enough. Have you no sense of decency, sir, at long last? Have you left no sense of decency?"

Moral of the story. Decency matters.

Triumph of the Optimists

While there were "blue wave" narratives on the 2022 Mid Terms (wishful thinking at mid-point of administration where Presidency, Senate and House controlled by one party, the Democrats), as the elections approached, the narrative shifted overwhelmingly towards a "red wave."

Had it played out, the red wave would have signaled a wider embrace of the Trump narrative of election denialism.

It would have manifested in the ascension into power of Governors, Secretaries of State and Election Heads by Trump acolytes, and set up the chessboard for a final hollowing of democracy. 

It did not happen, because:

1. The January 6th Committee did a remarkable job showing the knowing, treasonous behavior of Trump, all the while relying almost exclusively on the testimony of Republicans, not Democrats.
2. An ideologically poisoned Supreme Court knowingly threw out settled law, and overturned Roe v. Wade, showing that "dog whistle" rhetoric becomes dark policy in a zero-sum Republican controlled universe.
3. President Biden showed that policy matters, exhibiting a surprisingly stable hand in getting multiple quality of life, economic, social and global scale legislations passed, despite navigating the thinnest of majorities.
4. Enough independent voters ignored the lazy platitudes of a self-interested media (who need the scorched earth of Us vs. Them to drive eyeballs).
5. Enough women, people of color and even the young, stepped to the plate and made their vote count.
6. It became clear that MAGA stands for nothing other than cynicism, nihilism, polarization, lawlessness and hate, a point exacerbated by the politically-inspired attack on Nancy Pelosi's husband.

In the end, triumph of the optimists prevailed.

The Way Forward

The larger takeaways are that the American voter can walk and chew gum at the same time in the sense that he/she can support conservative policies and rule of law, can separate economy from demagoguery and that the American voter wants leaders that actually BELIEVE in America, its history, its institutions and its diversity.

For the Democrats (and a hopeful re-emerging moderate wing of the Republican party), the path forward is:

1. Espouse policy as a stated goal
2. Focus on specific solutions
3. Remember that all politics is local
4. Turn the tide on the judicial branch
5. Make decency and character table stakes
6. Hold Trump accountable so future coups don't look cost-free

Maybe this is our "Have you know shame" moment, where the tide turns to lightness, hope, and CAN vs. CAN'T.

A final thought. The larger truth, be it government, business, investing or social governance is that while we can agree or disagree on the definition of character, make no doubt, character matters.

What we sow is what we reap.

Creating Animated GIFs with Midjourney AI Art

A couple simple examples of how you can use variations to combine mutliple images to create simple animations.

This feels like the kind of thing Midjourney could automate the creation of at some point.

Btw, for some reason, you have to click the animated GIF for it to load.

Classic Zombie Film

This is the outcome of the following string:

classic zombie film with psychadelic zombies, insanely detailed and ornate 3D style, drawn on paper with ink, symmetrical, dream-like, colorful, vector, low poly, colorful patterned background fills page

I have built a library of prompts based on output from other Midjourney users that I then use for iterations.

So, the mindset is very Pay it Forward, Standing on the Shoulders (of those who put the work in before us).

Specific to the creation process of the animation, it's super simple if you are on a mac (and probably not that different on windows).

I use Apple Keynote, which is the Powerpoint-like software included on Mac.

(Sidebar: Keynote is GREAT for building UI/UX wireframes, and has lots of nifty features that make for better "symmetry" across the design process.) 

I change the slide size to match the output of Mijourney, which is 768*768 (when I use --test and --upbeta settings).

Then, I add each of the separate images as slides, and then do export as animated GIF, and finagle the timing of transitions until I have the cadence that I like.

Quick Tips of building animated GIFs

1. Don't undervalue the goodness of playing with the sequencing and timing to get cadence right.
2. Create more variations (which you then uplevel) to get a decent sample of options.
3. Don't feel like you need to use the entire image set.

But, only use the subset that feels symmetrical.

In the case of the skulls, I created 10 different variations, but winnowed the final version down to four images.

Steve Carell as the Incredible Hulk

One of my favorite aspects of AI Art is that it encourages unnatural juxtapositions.

In this case, I was thinking about the Bill Bixby version of the The Incredible Hulk where Bixby was the everyone guy, he'd get wronged, turn hulk, and then skulk out of town at the end of the episode with his duffle big.

Why note Steve Carell?

This is the outcome of the following string:

Steve Carell as Incredible Hulk during a summer rain storm epic lighting, hyper detailed, realistic photo, 35mm

This is the same precept as above with the zombies, but a little more expansive.

Check it out.

Steve Carell as Hulk

Related Post: Midjourney, DALL-E and the AI Art Wave

Generative AI: Midjourney, DALL-E and the AI Art Wave

I have seen the future, and AI Art is embedded in it.

Case in point, the above image was generated by typing nothing more than the words "a dachshund doberman mix with black fur and light brown and medium brown coloring riding a skateboard" on AI art service, DALL-E.

Four different variations were rendered in under one minute, I picked one version where I chose a few more variations, clicked upscale, and this is the output.

In under two minutes start to finish, I had created something magical (to me, at least).

The experience brought me back to Neal Stephenson's 'The Diamond Age,' which introduced the concept of a Matter Compiler.

Think 3D Printing, Generation 100.

The Matter Compiler of The Diamond Age was an atomic and sub-atomic assembly and render engine. Pretty much anything, organic or inorganic, live or not alive, could be output from a Matter Compiler.

If that is what the fully realized end-state looks like, then the potential of AI Art is some subset of that. 

A Sample AI Art Gallery

Here is a sample gallery I created in Midjourney, another emerging AI Art service.

Using the specific phrases you see on the each page, and then creating variations, and then iterating those variations until I got the looks that I wanted, is how I came to a finished instance. To finish, I upscaled the final candidates to the max.

Sidebar: The "finished product" is akin to an MVP but for visual prototypes.

Think of the word strings on each page of the gallery as akin to how we all got good-ish at fine tuning google queries to get the pinpoint return we were looking for.

This is best thought of as a render query, and it demonstrates AI Art's potential as:

• A new "compose-able" medium
• An artistic medium for creative dabbling
• An engine for product design
• A platform for extrapolating design patterns

I have two thoughts here.

One, most disruptive innovations start as "toys" and then as they ramp up the power and utility scale, find their niche and grow to dominate.

Keep that in mind in assessing the unfinished quality of what AI Art is at, and how magical it already is, anyway.

Two, by reducing the effort required for deep exploration and prototyping from a scarce, complex activity to a simple and unlimited one, AI Art creates a fertile environment for a wave of meta artists (and technicians) to emerge.

This is similar to the way twitter turned blogging from a niche universe to a 140 character tweet that anyone could instantly create and/or consume.

Segments Ripe for Disruption

Stock photos and stock images are one such example where this type of service could be a disruptor, but how about renderings of buildings, or of master planned communities?

But while AI Art for Images is pretty damn compelling in its own right as a native experience, AI Art is not just for Images, but for Music, Games, Video and Writing, too.

One use case I can see here is AI rendered post production services to overlay digitally rendered video, imagery and sound into movie scenes.

As social media showed, there will be an ever-growing content base, and all of the creative activities pursued by users through their usage will "train" the systems to yield better output.

This will by its very nature, MEANS accelerated learning patterns, and a virtuous innovation cycle as it kicks into high gear.

AI Art has the potential to be transformational for multiple industries:

1. Point of Interest (POI) libraries will have real value in how
   they enable better modeling and extrapolation
2. As a driver of growth, the scaling of Capturing,
   Rendering, and Output will be interesting to watch
3. Gilder’s Scarcity and Surplus Observation suggests that not only will this wave yield a lot of new value creation, but great monetary wealth

Deep Fakes or Parody: The Intellectual Property Question

A final thought. A question that both Midjourney and DALL-E are already grappling with in different ways is the question of intellectual property (IP) and use of likenesses and recognized brands, and how heavy-handed they should be with each.

At one extreme, you have deep fakes, counterfeiting and co-option of someone else's identity, brand and/or likeness in ways that invade privacy or damage one's rights to own and define that which is theirs.

At the other extreme, you have parody and satire, which is largely protected as freedom of speech and artistic expression.

Midjourney and DALL-E are in beta if interested in checking out.

Update: I LOVE this analysis by Sequoia Capital on #GenerativeAI, which they define as "A powerful new class of large language models making it possible for machines to write, code, draw and create with credible and sometimes superhuman results." This essay does a great job of codifying the different layers of the stack, and the applications they engender.

Update:Very strong analysis by Kevin Kelly (Picture Limitless Creativity at Your Fingertips) on how Artificial intelligence can now make better art than most humans, and will transform how we design just about everything.

American Exceptionalism: Dancing on the Razor's Edge

Winston Churchill once famously observed that "Americans will always do the Right Thing, only after they have tried Everything Else."

I guess we all know now the true meaning of American Exceptionalism!

Then again, maybe it's a necessary buzz-kill, in that it reminds us that the motivational razor's edge is mighty thin between democracy and authoritarianism.

For a generation who did not directly experience the horrors of World War II, who never had to sacrifice loved ones to preserve our freedom, let alone miss out on the latest Prada bag, Door Dash delivery, or egads, actually learn history, we occasionally NEED reminders of what falling into the abyss looks like.

The January 6th Hearings are a stark reminder that that which we FAIL to hold dear, we're destined to eventually lose.

Too much temptation for one side to seize the keys to the Kingdom, and restore the Monarchy.

Democracy is not our birth right, not the natural order, but rather something to be fought for and held tight, or as Benjamin Franklin once remarked:

"A Democracy, if you can keep it."

But how to add resilience into the system?

Three Keys: Education, Safety Nets and Reconciliation

Let's begin with Reconciliation (aka Towards a More Civil Union).

Light is the best antiseptic, so let's shine a light on the key questions of our times.

What are we fighting over?

What are we divided over as Americans?

What is the common ground we CAN agree upon?

If most of what divides the haves from the have nots is driven by socio-economic status, then what are the key stakes, stakeholders and incentives to drive the right outcomes?

Similarly, what are the reasonable checks and balances that mitigate against gaming the system?

By now, it should be obvious that better messaging is critical to overcoming the forces that divide:

1. The Venal (Fox News)

2. The Corrupt (GOP, Evangelicals)

3. The Conflicted (Corporate Lobbyists)

4. The Evil Dead (Haters, Inc.)

The Reconciliation needs to become a "thing" that is deterministically and memeticly messaged over and over, with a preponderance of facts, factors and clear choices.

It needs a well-funded, enduring bullhorn of a Public Service Announcement (PSA).

This is akin to the way we over-turned the culture of smoking in America through counter-advertising, education, formal labeling and yes, litigation.

In terms of Safety Nets, we have to decide if it's a Right to have:

1. A Roof Over One's Head
2. A Baseline of Universal Health Care
3. A Publicly Funded Education

Me personally, I think it is, but that doesn't mean that that right is free from: A) Personal responsibility; B) Some form of fiscal responsibility; and C) Some payback mechanism, such as a Peace Corps 2.0.

Speaking of Education, this is a battle ground, to be sure, with the public dollars that are critical to funding being leeched out of the system by the wealthier who can afford the best a Private School Education can pay for.

Plus, both left and right have strong opinions what the curriculum should -- and SHOULDN'T -- be.

Teaching Churchill's Truth: A Lesson in Bend Don't Break

My simple calculus on curriculum is based on direct experience.

I went to all public schools from Elementary through Middle School, High School and University, and greatly benefited from the diversity of a wide range of courses, including writing, reading, math, history (American and International), science, speech, foreign languages, shop classes, even home economics, curriculum that have seemingly been winnowed out in public schools.

If we could deliver the above before, there is no reason we can't do it again.

On a cultural level, I benefited from the fact that my schools (especially Middle and High School) featured a diversity of economic, racial, religious and cultural backgrounds among the student population.

This is an experience that forever shaped me by establishing an ability to connect with all types of people.

It also broadened my understanding that everyone has a different story to tell, and we all need fertile soil for those stories to germinate, take root and grow.

It certainly gave me more empathy.  

Kids bussing in from the inner city had it a lot tougher than me.

Thus, my bias here is to go back Churchill's notion that Americans will always do the Right Thing, only after they have tried Everything Else," and teach that truth, warts and all, bounded by three quantifiable, foundational goals:

1. Broadening Knowledge
2. Delivering Direct Experience
3. Cultivating Depth of Thinking 

By quantifiable, I believe that we manage what we measure, so some form of measurement is desirable.

But that's about it. If we want to add resilience to our system, we have to commit to a rebuilding phase focused on cultivating and delivering a generation that feels part of (and accountable to) something greater than themselves.

Stagflation and Death Spirals

Were the present time that I am writing about to be a movie, this would be the point in the story where Our Hero is hanging on the edge of a cliff.

Social division, multiple waves of the COVID pandemic, a rise in authoritarianism, and resulting proxy wars both at home and abroad, have taken their toll.

We're tired, many are depressed, and more than a few are broken souls.

Exhibit A: The Menace of Gun Violence.

Now, a slowing economy leads many to fear that we're heading towards an abjectly terrifying form of inflation known as Staglation.

What is Stagflation?

Stagflation is when two conditions occur simultaneously.

One, price inflation is high.

(I don't have to explain to anyone what that feels like.)

The other condition is economic slowdown.

When both these conditions occur, the cost of running a business becomes painfully high, so companies cut back, further slowing down the economy, which leads to a vicious cycle.

Coupled with social malaise, this cycle can feel like a Death Spiral.

Stagflation last occurred in the late 70s.

At the time, coupled with the U.S. having lost a war in Vietnam, losing to Japan in manufacturing, the broken trust of Watergate, the doomsday feel of the assassinations of JFK, Robert Kennedy, Martin Luther King and Peak Crime, meant America felt like its best days were behind it.

It's the single darkest time I personally lived through.

Reasons for Optimism

But here is where comparisons to the Stagflation of the late 70s feels off.

Unlike the bloodbath that was American manufacturing industry, the U.S. is still innovating quite well, and the supply chain shortfalls associated with so much offshoring suggest that we'll see more and more industries at least shift some of their manufacturing back to American soil.

Plus, the catalyst of the pandemic has re-invented where and how people work, opening up new avenues for innovation and job/industry growth.

On a social level, while there is undeniably plenty of racism, and rights we long took for granted seem like they're falling away (see Roe v. Wade), there is also no doubt we've made great social progress, which makes for a more dynamic America...if we can get through these tumultuous times.

This is our moment of bend don't break, and a hopefully stronger Democracy on the other side.

If we can keep it.

It’s a Madhouse: Thoughts on Gun Reform and Being Serious about Real Problems

There is a moment in the original 'Planet of the Apes' where Charlton Heston's Astronaut Taylor screams out in horror of a world that is upside down.

"It's a Madhouse...a Madhouse."

Putting aside the fact that Heston himself was an NRA-loving gun nut, the phrase "Madhouse" keeps echoing through my brain as we suffer through yet another gun massacre (Robb Elementary School), less than a week following the last massacre (Buffalo Supermarket Shooting).

How can one political party (the GOP) sleep at night defending and doubling-down on a policy that results in a never-ending stream of mass shootings each year at our schools, places of worship, workplaces and shopping and entertainment venues?

Do you or anyone you care about hang out at any of those places?

Do you really want to live in a world where dying in a hail of bullets is a "roll of the dice" possibility?

Just in our recent lifetimes, the names below have become synonymous with mass death, and families that will never be whole again, for no other reason than ready access to AR-15 assault rifles by those full of hate, disgruntlement, racism, youthful anger, retribution or mental illness: 

• Columbine High School (SCHOOL)
• Virginia Tech (SCHOOL)
• Aurora Movie Theater (ENTERTAINMENT VENUE)
• Sandy Hook Elementary (SCHOOL)
• Umpqua Community College (SCHOOL)
• Planned Parenthood (PLACE OF WORK)
• San Bernardino attack (PLACE OF WORK)
• Pulse Nightclub (ENTERTAINMENT VENUE)
• Las Vegas Music Festival (ENTERTAINMENT VENUE)
• Sutherland Springs church (PLACE OF WORSHIP)
• Stoneman Douglas High (SCHOOL)
• Santa Fe High (SCHOOL)
• Pittsburgh Synagogue (PLACE OF WORSHIP)
• Borderline Grill (DINING)
• Poway Synagogue (PLACE OF WORSHIP)
• Henry Pratt Co, (PLACE OF WORK)
• Gilroy Garlic Festival (ENTERTAINMENT VENUE)
• Virginia Beach (PLACE OF WORK)
• El Paso Walmart (SHOPPING)
• Dayton, Ohio (ENTERTAINMENT VENUE)
• Milwaukee Brewery (PLACE OF WORK)
• Atlanta spa shootings (PLACE OF WORK)
• King Soopers Boulder (SHOPPING)
• Indianapolis Fed Ex (PLACE OF WORK)
• San Jose VTA (PLACE OF WORK)

Being Serious About Real Problems

When one party's answer to the menace of gun violence is that there is ‘No Way To Prevent This,’ Says Only Nation Where This Regularly Happens, as The Onion scornfully mocks, that party has revealed itself to be rotten to the core.

If we can't even get serious about addressing a dynamic that is unique to the United States, that all Americans are affected by, then the pretenses of an allegiance to one nation, common sense solutions and rule of law, have mostly ended.

The lack of gun reform in the face of clear public opinion favoring it, is part of it, but so too is the disenfranchisement of women's rights, despite public opinion, the hollowing out of voting rights, despite public option, and the noxiousness and anomie symbolized by the January 6th insurrection, the big lie, denialism of climate science, etc.

Or, as David Rothkopf puts it in a brilliant thread:

It's the guns, but it's not just the guns. It's the racism, but it's not just the racism. It's the misogyny, but it's not just the misogyny. It's the attacks on democracy but it's not just the attacks on democracy.

The GOP has declared war on the nation of a functioning democracy (and by extension, the Democratic Party).

They eye test tells you that they are saying the quiet stuff out loud, actively de-constructing rule of law, rolling back long-standing, hard fought-for social gains, generally operating free of fear of consequences.

Again Rothkopf:

Compounding their hypocrisy is that the people for whom they assert they are fighting are just dupes, pawns they use to maintain power so the leaders of the movement and its funders can profit, can rig our system to promote inequality and to enhance already obscene riches.

...and yet the Democrats turn the other cheek, when they should be approaching this as the fight for our lives as a free society.

One party is the party of AR-15's, both literally and metaphorically, and the other is about "When they go low, we go high."

Really? Have you ever faced down a bully, where reason and compassion actually worked?

I hearken back to what Jim Malone tells Elliott Ness in 'The Untouchables':

"What are you prepared to do?"

Holding Our Leaders Accountable: It's a WE Problem

As Americans, we must demand better. Being an exceptional country should free us from the tyranny of: 

— Gun Menace

— Endemic Corruption

— Gluttonous Greed

— Economic Hopelessness

What scares me most is not those whose purpose is full of ill-intent.

The existence of those embracing the dark path is as old as Eden.

What scares me most is an observation I've noted traveling around the country over the years.

Ironically, the same notion was validated recently by a conservative friend, who bicycled across the country, and was struck by the observation that major swaths of the the country -- 30-40% at least -- is not intellectually curious, fact bound or discerning.

They are empty vessels.

In a post local newspaper world, they exist in a news desert, all-too-readily radicalized by the FoxNews or Facebook-fed narrative of hate (versus hope), vengeance (versus virtue) virtual, and civil war (versus unity).

Enough.

As Howard Beale says in 1976's prescient 'Network':  

"I’m mad as hell and am not gonna take it anymore. "

Life Lessons: Always Be Teaching

One of the truisms that I embrace in life, and encourage others to embrace as well is the notion that life is full of "teachable" moments, so whether it is your child, your partner, a client or a co-worker, you should adopt a mindset to Always Be Teaching.

Why do I say this? Number one, the idea of giving back, and giving more than we take, is a powerful, pay it forward concept.

Don't talk the talk. Walk the walk.

Two, the idea of teaching and teachable moments forces one to soften their heart when others fail to see the full picture.

After all, there is a BIG difference between, "You let me down" and "Let me show you how to be better."

Three, the idea that we are teaching versus, selling, directing or admonishing, really focuses the mind.

What am I trying to communicate? What is the outcome goal? What other pieces do my counterpart need to know to be successful here? What is a reasonable expectation given the current understanding at hand?

Finally, when you embrace the notion of teaching, and BE-ing a teacher, you come to see interactions as part of a practice, and a discipline that requires a different kind of preparation, which forces YOU to be better, more directed and more process-driven.

By giving back, you become better.

Find Your Purpose

As the year winds down, and a new one is set to begin, know this. We have a limited time on the planet to make our mark (whatever that mark is). 

Don’t waste time with apathy, excuses or laziness.

Where confusion reigns, take inventory, seek answers, write it down and iterate.

Every breath is a blessing. Make it matter. Make your mark.

Ruminations on The Fountainhead vs. Atlas Shrugged: When Does Personal Integrity Become Narcissism and Sociopathy?

I am a big fan of juxtapositions; the idea of putting two disparate concepts side by side to get to a larger truth.

One of my favorite juxtapositions is Ayn Rand's "The Fountainhead" vs. "Atlas Shrugged."

I find that people who've read both books tend to favor one more deeply.

The Fountainhead is largely a tale about the price one pays for pursuing and maintaining Personal Integrity at all costs.

It's a book about being true to one's self.

Atlas Shrugged is about the Makers vs. the Takers (tell me if you have heard this terminology before).

Atlas Shrugged poses as a book about Creating and Building when it's really a book about Narcissism and Sociopathy.

I say this because it presents a false dichotomy and a cynical view of society and institutions when the truth is more nuanced.

Every bit of infrastructure we have is built by our institutions, and the greatest companies are built on the backs of TEAMS of great people, many of whom never get rewarded or fully appreciated for their efforts.

The idea of a Maker or Taker is core to what is wrong in our society.

It foments the narcissist view of "I create" over the more humble truth that "We built."

It fuels the sociopathic view that great societies can't or shouldn't commit to great health care, great education and safety nets.

It's a relic of a time when the stark choice was between the black hole of communism and totalitarianism, and the optimism and the realm of the possible afforded by capitalism and democracy.

We live in a time where such false dichotomies position capitalism against democracy, where one has to come at the cost of the other, when the more noble path is learning to reconcile and embrace the AND.

Needless to say, I LOVE The Fountainhead and have a gag reflex about Atlas Shrugged.

Ruminations on the Test Drive: If you want to see how it ENDS, look at how it BEGINS

One of my favorites axioms is that if you want to see how it ENDS, look at how it BEGINS.

The saying is an acknowledgment that human “actors” do the actual work in life, so whether they hit the ground running (or not); are easy to work with (or not); or do what they say (or not) is indicative and predictive of how things will go in the relationship.

Think about it. On a personal and professional level, people are generally on their best behavior at the beginning of a relationship. 

It is also a time when they are expected to be prepared and have a plan.

This is why I say that if you want to see how it ends, look at how it begins. 

People who are easy to work with and on top of things when you first start working with them, are generally going to be good to work with over the long haul.

People who rub you the wrong way, or don’t have their act together when you first encounter them, are telling you something about who they are. 

Ignore this fact at your own peril.

Which brings me to the goodness offering a "test drive" of your product (or service) before committing long term.

Why do I advocate this?

Going back to the notion of seeing how things end by looking at how things begin, having a test drive in your selling funnel accomplishes the following. It:

- Delivers tangible, quantifiable value
- Establishes credibility
- Enables the client to get buy-in
- Sets a framework for the working relationship

In the process, it forces you to focus on the sharp edge of the spear in terms of your offering.

A test drive can start simple, it can take lots of different forms, and be iterated over time. 

In the case of my company, Datex Property Solutions, we began with a data analysis of our clients' MRI or Yardi databases, then expanded the offering to a test drive of the base Datex platform, and then extended it further to support test driving our reporting automation capabilities.

Clients have told us time and again, that the value proposition really moved the needle for them. 

When done right, a test drive is the ultimate show me, which is a win-win for both sides.

Ruminations on Curiosity

It's been ten years since Steve Jobs left us. So much of the way I think about platforms, innovation and the application of technology to life has been shaped by watching and learning from Apple (and Steve Jobs). 

I've sold a company to Apple (Me.com), sold Apple-based networking systems in my career, built a business building iOS Apps, and written 100+ posts on Apple.

More so than any attribute of Apple is Jobs' aspirational mindset of pursuing the Insanely Great and "puncturing holes in the universe" through innovation, and that begins with a practiced with dogged-ness, earnest-ness and deep hunger.

With that in mind, I love this quote from Jony Ive, remembering Jobs' deep sense of curiosity:

"He was without doubt the most inquisitive human I have ever met. His insatiable curiosity was not limited or distracted by his knowledge or expertise, nor was it casual or passive. It was ferocious, energetic and restless. His curiosity was practiced with intention and rigor."

That, in a nutshell, is the power of curiosity.

It specifically is NOT bounded by knowledge or expertise. With purpose and intent, ALL doors are open to the curious.

I also love this quote from Albert Einstein, one of the greatest thinkers of all time.

Understanding the "Vampires" Among Us

Vampires are dark energy types; they are malevolent, grasping and greedy operators that prey upon and feed on the psychic and real lives of other people.

These blood suckers carry socio-economic contempt for “the other,” who is perceived as a loser, deserving of their destiny as sacrificial lambs.

To the vampire, the rule of law is that to the victor goes the spoils.

Everyone else gets crumbs, and are lucky to even get that.

There is no room coexistence with vampires, just as there is no co-existence with the mosquito, the sociopath and the criminal.

Yet, we are surrounded by parasites and predators who don’t embrace what it means to live in a society.

On Bias, False Dichotomies (and other Four Letter Words)

While the macro “industry trends” are all towards Big Data and Intelligent Systems as the force multipliers that will drive the greatest growth over the next decade, it's actually the Human side of the equation that many of us struggle most greatly to reconcile in business and in life. One of the most basic areas of struggle is in the realm of Biases.

While there are literally dozens of types of Biases, the one that I want to focus on in this post is a False Dichotomy. (In a later post, I will talk a bit about its sibling bias, the False Equivalency.)

False Dichotomies manifest when (biased) analysis and decision-making yields black and white conclusions on topics that have clear dynamism or nuance.

Consider a topic such as product segmentation; namely, how much functionality to add to service what specific outcomes, and what types of users relative to market needs, at what pricing and support level.

The above example might reasonably support dozens of different narratives around what the right solution buckets are for the various addressable segments of the market.

But, specifically because such analysis can yield different assessments, it’s ripe for biases – good and bad – to shape the discussion.

When the internal back and forth falls into an all-or-none dialog, such as “We can either be a client focused company, or a money focused company,” that is a false dichotomy at work.

So how do you counter a false dichotomy? Three principal ways are through effective countering, introspection and teaching.

Effective countering in the above example might lead to a discussion of the different types of users being served, and what their needs and constraints are.

Sometimes, more isn’t better. It might add complexity, it might impact speed, it might lose 90% of the target users, who don’t want a Swiss army knife solution, and just need one or two really specific, highly optimized capabilities.

Introspection might treat the topic as an opportunity to surface externalities that drive the biases. “Josh, do you think we have a culture of placing dollars above the need of clients? Is there a specific decision we’ve made in the past few months that you think is reflective of compromised values?”

The point here is two-fold. One, light is the best antiseptic when it comes to getting to the right outcome and surfacing the sub-narratives that trigger such biases.

Two, is that getting to specificity is the best way to get past black and white narratives.

Related to this is the notion of teaching. When I find myself getting sucked into a false dichotomy with a co-worker or a personal relationship, I specifically call it out as a false dichotomy, explain what a false dichotomy is, point out the gradations of analysis, and shine a light on this as a point of emphasis with the individual until the topic is internalized.

Always be teaching, as making people better is the ultimate force multiplier, but that’s a post for another day.

Two of the biggest truths about understanding the power of Incentives

Two of the biggest truths of my career (and life in general) pertain to the power -- for good and bad -- of incentives. One, is the basic truth that what you INCENT is what you REAP. Put another way, show me the incentive, and I can tell you the outcome.

We humans tend to confuse attributes and outcomes, so often come up with incentives for our co-workers, clients, partners, peers, children, etc. that are misaligned with our outcome goals.

Unsurprisingly, this leads to bad outcomes.

The remedy is to begin with the end in mind, actually taking inventory of what success looks like, what the integral steps are to getting there, ensuring that incentives reward those outcomes, and over-communicating both the incentive and the GOAL of the incentive.

Narrative matters, and so how we manage incentives and measure results is critical.

The second truth, which is an immovable object in my opinion, is to NEVER underestimate the power of people's ability to convince themselves of ANYTHING when they believe their livelihood depends upon it.

We often confuse company objectives with self-interest and the need for self-preservation, and so we get steamrolled when we expect people to act in ways that our counter to their self-interest, irregardless of company goals.

The solution is empathy, and investing in understanding the various stakeholders, their goals, constraints and biases, and being ready to play the long game when those elements don't line up, as they often don't.

In my experience, this is not specific to industry, seniority, or stage of life. It is elemental to people's reason for being, and we forget that fact at our own peril.

Ruminations on an Amoral Company

When does a company cross the line from profit-seeking to ruthless? 

When does it cross the line from ruthless to treacherous? 

Is ruthlessness okay in business, as in buyer beware?

Or, when you’ve shown loyalty to a business through repeated transactions, universal embrace, and favorable word of mouth, is there a contract of sorts?

You know, that that brand won’t betray your trust, or materially change the rules without full transparency.

Uber: An Amoral Company

I pose this question since, as a frequent flyer, I find myself opening the Uber app to take an Uber ride at different airports several times a month, and have done so for years. 

While my behavior hasn't changed, one thing has notably changed in recent months. 

Specifically, I have been shocked and disgusted by Uber’s surge pricing practices, which are clearly predatorial.

When I say predatorial, I mean that Uber is specifically “gaming” the consumer at the airport by routinely charging 2X - 4X normal pricing, trying to engineer specific consumer behaviors; namely, paying a crapload more money, knowing full well that the customer:

A) Has few options

B) Has limited mobility

C) Feels on the clock post-flight

D) May be able to pass the cost on to their employer

Case in point, I have seen repeated examples at SFO, where a fare that normally varies from $28 to $55 was $150, a #FFS (for fuck sake) number that it should be noted is 5.36X the lowest rate offered by Uber!!

Predatorial Capitalism

So, you say, well that’s how surge works. Get over it.

Sure, but that begs the question of WHAT is the catalyst for the surge.

Feeling gut-punched, I clicked in and out of the Uber fare query function, and the $150 rate quickly toggled down to $78, then, when I didn’t bite, back into $125, never getting much below $100. 

But within 15-20 minutes, the price was back to a more manageable $57.

Like clockwork, I have played this cycle with Uber several times.

But, then I was at Burbank Airport the other day, a suburban, somewhat smaller municipal airport.

What would have been a $30-43 fare, was instead, $120.

For a brief moment, the app showed a $68 rate that felt unfair, so knowing the game, I passed.

For the next 35 minutes, I repeated the learnings from above, but to no avail.

A Second Chance to Make a First Impression

In my article, 'Reopening Retail: A second chance to make a first impression,' I wrote that post-pandemic, retailers and businesses of all types, having been “battle hardened” need to recognize the golden opportunity; a second chance to make a first impression.

The point being, while it's tempting to squeeze every dollar and cut every corner, in times of disruption, the consumer is at play, and will switch loyalties for those who fail to read the tea leaves.

So how has Uber approached this golden opportunity?

So, un-valuing are they of my history of customer loyalty -- thousands of rides over 10+ years -- that Uber has literally forced me to give Lyft a shot.

It's akin to Apple so antagonizing their users that they are pushed to switch to Android.

In this specific case, while Uber was trying to con me into paying $120, the same ride was $46 on Lyft.

Imagine finding that Amazon was trying to charge you 260% for the same set of headphones as at Best Buy...would you EVER trust them again?

But, here’s the kicker. The con is even worse.

For shits and giggles, I tested the pricing query a couple miles from the airport, and guess what? The most recent $110 fare had flattened to $28.

Twenty-eight frickin bucks!

The 'Bad Boy' Among the Tech Unicorns

I have some thoughts on this. One is that Uber affirms the fact that if you want to see how it Ends, look at how it Begins.

Here, the data is really clear. Uber has always been the Unicorn Bad Boy.

Engaging drivers through aggressive promotion and incentives, then callously commoditizing their work, then cannibalizing drivers with an explicit goal of putting them out of work some day.

The same drivers whose participating made the business work, ALWAYS treated like second class citizens and disposable, man-handled with all of the goodness of employees in terms of coordination and determinism without the messiness of having to actually pay benefits, let alone their fare share of taxes.

I get the easy narrative, as I am an entrepreneur myself:

1. Disruption was often messy, so adolescence and aggression were to be expected.
2. It was the Founder’s fault. and now he’s gone.
3. Fares are higher because costs are higher.
4. Surge is more prevalent because there are less Uber drivers post pandemic.
5. Prices were subsidized in the past and now they aren’t anymore
6. Blame the algorithms. They work TOO good.

All true, but you are what you DO.

The algorithms, are only as good, moral or amoral, as the people that create them.

I am reminded of a great analogy by Kara Swisher, one of my favorite writers and thinkers, that There Must Be a Pony in Here Somewhere (because there is so much Shit).

There are only so many excuses one can stomach for bad behavior.

You are what you DO.