Luca's newsletter – On Schelling points, distribution, arrogance, and more (2020-12-19)

Here’s a new edition of my monthly newsletter. This time, only with the quotes of the week, as I’ve been busy publishing the second edition of my book on management (read the free excerpt here).

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Quotes of the week

Arrogance

I find it annoying that many are conflating anti-vaxxers that refuse well-tested vaccines with rational citizens looking at skepticism at a barely-tested COVID vaccine.

This is just an instance of a pattern.

“When you pose a persuasion problem as an education problem, you pathologize the unpersuaded.” – Jed Trott, link

Experts

“The problem with ‘believing the experts’ is that for every expert, there’s another expert with equal credentials saying the opposite. The media chooses which side to report, thus becoming the ‘expert’ you are believing.” –@bp2username, link

Prioritization

“It’s almost impossible to burn out with Pareto’s 80/20 rule.” – Daniel Vassallo, link

The implication of Pareto’s rule – “focus on the 20% of actions that bring the 80% of the results” – is not about doing what’s most effective. It’s about not doing what’s ineffective. Why? Because any activity to which we participate has a cost, paid in time, energy, money, or focus.

Competition

“Every time I see an inferior product winning in the marketplace, I’m reminded that products don’t compete, companies do.” – Florent Crivello, link

Distribution matters (network, brand, non-product competencies such as sales, and so on).

Schelling points

Imagine that you are given this message: “you and another person have been randomly chosen. If you meet with him/her in New York next Sunday, you’ll both win one million.” You don’t know who this person is, nor you can contact him or her. What do you do?

You should go where you think he or she might think to go. A good guess is a place that is likely to come to mind to most people. You should go to the Empire State Building. That would be a Schelling Point.

A Schelling Point is an option that people choose because they think that others are likely to choose it.

I’ve argued in the past that the stock market is becoming at least partially a game of finding Schelling Points. Below is another application of the concept.

“I get upset when people use words imprecisely, not because “that’s not what the word REALLY MEAN” (which is a completely meaningless statement) but because they are polluting the commons. Language is a sea of Schelling Points and when people defect for short-term purposes, we lose coordination power in the expressive domain.” – Luis Pedro Coelho, link

News

“If you diet, invest, and think according to what the ‘news’ advocates, you’ll end up nutritionally, financially, and morally bankrupt.” – Naval Ravikant, link

Back in January, mainstream news missed the story of the decade: COVID. Why?

One reason: reporting on Shelling points is more profitable – at least for mainstream news.