Commoncog

>of a particular service provider (custom motion systems) whose philosophy was to break even on the first job and profit on any followups. It's called Learning Curve Based Pricing / Experience Based Pricing First popularized by BCG (Boston Consulting Group) and Texas Instruments https://commoncog.com/c/cases/texas-instruments-learning-curve/ Helped Texas Instrument become what it is, and dominate the decade that it implemented this strategy against its peers. The guy who invented it there, was who later founded TSMC Morris Chang

If you enjoyed this you'll probably also enjoy "The Games People Play With Cash Flow" [0] And for the classic HN comment about the site itself: I think it looks very nice, but the native justification algorithm is not very good (especially with hyphenation turned off) so it ends up looking quite sparse at parts on mobile and is a bit jarring to read. I'm a big fan of this implementation [1] of the TeX linebreak algorithm for the web, and think it would make this site look even better with minimal effort. [0] https://commoncog.com/cash-flow-games/ [1] https://github.com/robertknight/tex-linebreak

Cedric Chin has a great series on this and has done a deep dive into Deming: https://commoncog.com/becoming-data-driven-first-principles/

I remember reading this a few years back and thinking it was insightful: https://commoncog.com/a-framework-for-putting-mental-models-to-practic… Do give it a try. It has overlaps with Farnam Street's content.

Defensibility re: companies is well studied, by Hamilton Helmer who and his grad student did case studies of several hundred "defensible" companies and identified 7 "powers" that help companies defend against specific competitors. Note that each power is only applicable towards a specific competitor, and not as a blanket statement. The powers are 1. economies of scale, 2. network effects, 3. counter positioning, 4. Switching costs, 5. Branding, 6. Cornered resource and 7. process power. I highly recommend Cedric's writing on the topic (behind a paywall) https://commoncog.com/7-powers-summary/

I would recommend reading: Complexity by M. Waldrop https://commoncog.com/learning-from-waldrop-complexity/ The Systems Bible by J. Gall (This one is an odd one but it is good for developing a sense of humor) https://novelinvestor.com/notes/systemantics-how-systems-work-and-espe…

This is a tech-focused selection from my personal list, with a few more business-y sources thrown in: - https://erikbern.com - https://lethain.com - https://commoncog.com - https://scattered-thoughts.net - https://danluu.com - https://ideolalia.com - https://staysaasy.com - https://collabfund.com - https://blog.nelhage.com - https://jacobian.org - https://equalventures.substack.com - https://defmacro.org - https://spakhm.com - https://apenwarr.ca - https://scarletink.com - https://benkuhn.net - https://cpojer.net - https://brandur.org - https://zeptonaut.com Let me know if you want some reading recommendations for any of these!

This is the problem with both SMART goals and OKRs. They purport to be meaningful by measuring results, but results are outside of one's control and subject to the inputs of lady Fortune! What we want to incentivise is not success, but the kind of behaviour that leads to success. But that, on the other hand, suffers even worse from Goodhart's law. Cedric Chin dug deeply into this dilemma[1] about a year ago. His suggestion is to frequently follow up on both behaviour metrics and result metrics to build a tacit understanding of how one is affected by another. This then allows you to focus improvements on behaviour metrics, which are mostly in your control. I have yet to try putting it to practise, but I like the idea. [1]: https://commoncog.com/goodharts-law-not-useful/

The second half of this article explains Amazon's process around metrics, well worth a read: https://commoncog.com/goodharts-law-not-useful/

One of the best articles on this subject - Goodhart's Law Isn't as Useful as You Might Think by Common Cog. Good overview of Goodhart's effects and particulary effective practice of fighting it at Amazon from "Working Backwards" book. https://commoncog.com/goodharts-law-not-useful/

In a similar vein is Commonplace by Cedric Chin. Think a Stratechery that analyzes individuals, not corporations. Has great summaries and read/don't read recommendations on book. One of the few blogs I didn't end up unsubscribing from in annoyance. https://commoncog.com/blog/

this lia dibello profile is a more nuanced take on this topic https://commoncog.com/blog/business-mental-model/ this research claims: > people who have achieved a high level of business expertise have a deep understanding of the following three core areas: (1) factors involved in effective operations, (2) forces influencing the market, and (3) those driving business finance and economic climates these information sources are, in a sense, 'ideas', but they are discovered through execution softer version of this claim is that 'ideas' come from market research, and market research is not that different from execution

If you want alternatives to DP that work much better, it might be worth it to take a look at: 1. The Tacit Knowledge Series (which argues that methods from Naturalistic Decision Making are more useful when you are in a skill domain with no good pedagogical development) https://commoncog.com/blog/the-tacit-knowledge-series/ 2. Accelerated Expertise — which covers methods from the military to accelerate expertise acquisition (and, yes, some of it uses DP principles, but it isn't really DP) https://commoncog.com/blog/accelerated-expertise/

This is a good read on the topic: https://commoncog.com/blog/action-produces-information/

Wow what a great read. The other article about where first principles fails [1] is absolutely amazing as well. The debate about experience vs first principle is a heavily recurring theme in the tech industry. I couldn’t structure my thoughts about it in words and the article perfectly sums it up in a succinct manner. [1] https://commoncog.com/blog/how-first-principles-thinking-fails/

I recommend give this a read it’s quite interesting: https://commoncog.com/blog/tacit-knowledge-is-a-real-thing/ You need to do the thing to gain expertise but also learn it inside out. Academic + school of life = expert. Academic can mean formal education, can also mean self taught from books, papers or talking to other people.

Here's is a useful categorization of nonfiction books into three kinds: narrative, tree, and branch. The "tree" books are the most enlightening and worth reading to have your perspective shifted and grown. https://commoncog.com/blog/the-3-kinds-of-non-fiction-book/

Another reminder that the advice doled out to teens to "follow your passion" when selecting a major and a future career, is rather irresponsible. Cal Newport's "So Good They Can't Ignore You" is a great read on this topic: https://commoncog.com/blog/so-good-they-cant-ignore-you/

Teaching Tech Together[1] is an incredible resource for learning how to structure lessons in a way that makes ideas stick. Highly recommend. Commoncog has a nice general overview [2]. [1]: http://teachtogether.tech/en/ [2]: https://commoncog.com/blog/teaching-tech-together/

There's been many studies around the concept "how do you get expertise? In what field can you actually develop expertise?" such as Naturalistic Decision Making [1] [2]. The wisdom from there can be applied to the question of automation. If your task is for example, to pilot a preset route with stable condition and very low surprise, you will fall for the "getting too comfortable" trap and we tend to start to get lazy(or efficient) and offload the mental effort and skills atrophy. A common workaround to this is to have regular training(deliberate practice) that introduce the "tricky" situation to keep the skill up. Problem ofc arises when people don't keep this up. This can be seen in the diagnostic performance differences between junior and senior doctors, not always in the favor to the senior [3]. If you add a layer of automation but the insight gathered by working on that layer is great (and falls off) then deliberate practice start to become a requirement [1] https://commoncog.com/putting-mental-models-to-practice/ [2] https://youtu.be/5eW6Eagr9XA?si=Y9exacaW-F4PDOKF [3] https://pubmed.ncbi.nlm.nih.gov/26375267/

Books do work if you know how to be a good reader (I'm taking a course right now on "How to Read a Book" based on the Mortimer Adler book). The key to learning from a book is to interact with it kinesthetically and through metacognition. Skimming, outlining, writing notes in the margins, questioning, are all part of analytical reading. Furthermore, there's syntopical reading which tries to fit things into a larger tree and seeing how things interrelate through comparative reading. It's all really hard work, but the goal is deep comprehension (the kind that enables synthesis of new ideas). Memory is not the goal, though having a good memory helps when one is diving into a new book or journal paper. A memory aid like Anki can help one get up to speed quickly when there are lots of new vocabulary and concepts. [1] But memory alone will not lead to comprehension -- one needs to converse with the text as if one were picking the brain of someone who is our better. (if the author is not our better, best to just read the book cursorily, extract a few points and discard -- no need to do a deep reading) That said, having Anki as a memory aid can lower the activation needed to read the literature say of a new unfamiliar field. Another way to lower the activation to reading the literature is the "land and expand strategy" [2] where you read stories about thing you're trying to read rather than starting with the thing itself. [1] http://augmentingcognition.com/ltm.html [2]…

There's a great book called the Procrastination Equation that addresses this, and offers a different equation than Fogg. Motivation = (Expectancy + Value) / (Impulsiveness + Delay) It's useful to know what each of those terms means. Your motivation is for a specific task or goal. Expectancy is your confidence that you can complete a task or reach the goal. Value is the importance you assign to the goal. Impulsiveness is how distractable you are, or your susceptibility to other interesting things that you might do instead of working toward the goal (like writing comments on HN! ;). Delay is the amount of time you have until the task should be completed. The more distractable you are, and the more time until you hit your deadline, the less motivation you have. The more confidence you have in your ability to complete the task, and the more importance you assign to it (eg this is life or death), the more motivated you are. Cedric Chin has a nice overview here: https://commoncog.com/blog/a-user-review-of-the-procrastination-equati…

"4" is not something you find in life right away. Finding a passion should never be the first goal you think of, some may never find a true passion worth following. That's okay, because not everyone is this way. A good example of a "4" is elon musk. His motivation stems from reading Hitchhikers guide to the galaxy at any early age. He stuck to the same quotes that motivated him today. That is true passion. I have a friend who is very good at "4". Knowing "4" as a deep level, helps you identify similar "4"s. People will remember you as that person with a strong "4" and drive inspiration from you. My "4" is pretty generic. Its to give back to all the technology that has defined me growing up. This is the internet, TV shows, video games, smartphones, etc I have taken for granted in this generation. And by definition, the hardware and software to enable those things to be. That's my reasoning. Anything that benefits the persuit of my "4" is fun to me. I like building tools to empower others, my guiding philsophy is similar to Douglas_Engelbart, inventor of computer mouse. "4" is the small things in life https://en.wikipedia.org/wiki/Douglas_Engelbart. > guiding philosophies https://www.youtube.com/watch?v=IPYeCltXpxw. > how, why what ------------------------------------------------------------------ The "how" of "4" is driven by 2 different things: - Automation - Documentation Growing up, I have always been obsessed with automation. This is because I started working at…

Going to drop this https://commoncog.com/the-tacit-knowledge-series/. Tacit experience gives you taste in my opinion.

> learn to turn off the over-thinking part of the brain that blocks creativity This is all pretty vibe-y but I think that might be what the post’s author found the ability to do and is trying to teach? TFA links to this other post in a similar vein: https://commoncog.com/get-numb-get-good/

I, from a country with few conglomerates, found the Commoncog explanation for why they exist to be interesting https://commoncog.com/how-to-become-an-asian-tycoon/ https://commoncog.com/the-asian-conglomerate-series/

That reminds me of the restaurant using its liquidity to prepay its dry aged steak supplier. https://commoncog.com/cash-flow-games/#3-pre-payments-in-the-restauran… Liquidity is expensive. Selling a carrier one at a time is like a retail business where you're expected to hold onto stock. If you don't build up an inventory to sell from and just sell one unit, you have to markup the price to cover the cost of the factory when it is idle.

A version of the paper can be downloaded from SSRN: Kaniel, Ron and Orlov, Dmitry, Intermediated Asymmetric Information, Compensation, and Career Prospects (February 4, 2020). Available at SSRN: https://ssrn.com/abstract=3532128 see also: discussion of the consulting business model from David Maister’s book Managing the Professional Service Firm https://commoncog.com/the-consulting-business-model/

Doesn't this forum periodically discuss an article[*] about profit not really mattering in the grand scheme of things? (As in, profitable and growing companies are capable of showing profit whenever they want, and conversely to show no profit if they so wish.) [*] This one I believe - https://commoncog.com/cash-flow-games/

Common Cog business newsletter did some articles [1] about how this was implemented in Eleven Madison Park, starting in 2001 when Will Guidara [2] took over. [1] https://commoncog.com/hospitality-solution-business/ [2] https://en.wikipedia.org/wiki/Will_Guidara