What I read this week – 30th week 2020

This week I’ve been reading plenty of interesting content from many sources. I’ve gotten into reading some philosophy again, along with reading Competition Demystified, and getting nomnomnotdairy.com up and running. This week I sum up reading about capitalism, TikTok, meaning, the anthropic principle, France, and where I think Competition Demystified went wrong.

What I read

The first topic that I read about this week is related to the idea of a capitalist endgame. The first article is a touching and interesting piece about the never-ending pursuit of efficiency, and how this removes some of the humanity. Below is a quote that really stuck with me. The second article on a similar topic is a short Business Insider piece on how the 1% ended up owning so much wealth, suggesting at the end that inflation, which monetary policy has been avoiding high levels of for a long time, might be the answer to distributing wealth.

Cracks · “There is a crack in everything, that’s how the light gets in” sang Leonard Cohen. And there need to be cracks in the surface of work, in the broader organizational fabric that operates the world. Because that’s where the humanity happens.

Just too efficient – Tim Bray

The second topic this week is TikTok. India has banned the application, along with many other Chinese applications, and the US is considering doing the same. The US army has banned the application from phones on its bases. Part of the reason for this is that the Chinese Government can requisition any data that it wants from companies based there, and TikTok collects a whole host of data from the phones that run it. The other reason why the US might ban TikTok is because of the black box that is the algorithm that picks what you see. This article explains the threat of a black box algorithm wonderfully, and I would recommend it to anyone with an interest in the future of social media.

Very quickly, the third idea combines the idea of feeling lost in society with looking for a purpose. There is a review of TFW NO GF, a look into the life of four NEETs (not in education, employment or training) with online notoriety, and a short article on millennial management consultants who are more picky about which companies they want to work with than their predecessors, for ethical reasons. I grouped these two articles together because I felt that they both epitomize the general feel of a generation: looking for meaning in a world that is driven by the pursuit of efficiency. (This is why I thought it was important to start a company around a core mission and pillar values. I’ll write about this in the future.)

Man Proposes, God Disposes, by Sir Edwin Landseer

The fourth idea is called the Anthropic Principle, and is from an article I stumbled across which is a primer for a book of the same name. The basics of the idea lie in bias in data collection. One example given talks about how, in 1936, Literary Digest conducted a poll to see who might win the upcoming election. They concluded that the Republican candidate, Alf Landon, would win. Of course no-one outside of the US has heard of Alf Landon, but everyone has heard of the person that Literary Digest predicted would lose, Franklin D. Roosevelt. This is because the people that Literary Digest sampled came from telephone books and motor vehicle registries. In 1936, this was a huge source of bias, and resulted in them only sampling people wealthy enough to have a telephone or a car. Anthropic reasoning, or reasoning about the source of these biases and where they might appear, can help us think about whether there is life on other earth like planets (reasoning is difficult with a sample size of one). If you have an interest in philosophy or epistemology I would highly recommend reading the very accessible primer.

The fifth idea is from Nicolas Colin, a French startup investor. In his article he explains the history and formation of the French elite, through their education at the École nationale d’administration and progression into on of the three Cours: Cour des comptes, Conseil d’État, and the Inspection générale des finances. These bodies all perform different roles, but their importance in forming the French world of business and government cannot be understated. Of the current President, the outgoing Prime Minister, and the incoming Prime Minister, all three of these Cours are covered. And all three of them went to ENA. If you want to understand the culture of the second biggest nation by GDP in the EU, I recommend this piece.

Competition Demystified on Apple

I am currently reading Competition Demystified, and I am about 35% of the way through. Recently the book has performed analyses of the competitive advantages of Coors, Walmart, and Compaq. It has also performed an analysis of Apple, but this is where the book gets interesting. The book was released in 2005, when an Apple share was worth $4. Now Apple shares are worth nearly $400. In 2003, when the book was likely being written, the shares dipped below $1. Competition Demystified concludes that Apple doesn’t have much chance, as it doesn’t have a competitive advantage in any of the markets in which it operates (OS, box making, software making). I think that the book gets it wrong a for a couple of reasons.

Firstly, using the tools provided by Competition Demystified, Apple has a very loyal fan base so can protect its market share. Part of having a loyal fan base for most products is that they have the habit of buying that product. For Apple, the habit is using an Apple operating system instead.

Secondly there is value in having a suite of tools that connect automatically, like Apple has. The authors couldn’t have predicted the emergence of this suite due to the inventions of the iPad, iPhone, and iCloud. This advantage is explained well here in the context of Slack vs Teams.

Finally, and I’m not certain about this one, but my feeling is that Apple have managed to create a luxury product in a commodity market. When an individual is considering buying a computer or phone, they either already know that they are buying an apple device (to replace another apple device), or they are comparing products. If you compare products on a quantifiable basis (computing power, memory, price), Apple doesn’t come out on top. But there is a non quantifiable value in owning an Apple device due to the way that Apple devices are perceived.

Now I know that I, a recent university graduate, am criticizing one of the most highly rated recent business books. But Competition Demystified must have missed something because they were clearly wrong when they said there was little hope for Apple.

If you have any recommendations for things to read, watch, or listen to, send me a message on LinkedIn, or email me at contact@callumacdonald.com.

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