Will the Real Mitt Romney Please Stand Up?
From: yamamotog@xxxxxx.comMy dad died later that year, never knowing for sure whether the Higgs boson existed or not.
Date: June 25, 2010 1:46:56 PM PDT
To: wayne....oto@yyyyy.com
Subject: Re: Public Lecture by Bernard Schutz of AEI, Potsdam, Germany
Way back, I was interested in gravity waves. I thought I could generate gravity waves and detect them using some sensor to detect them to prove gravity waves exist. I was going to generate gravity waves by rotating a massive cylinder. I thought this will generate gravity waves but I hadn't figured out what I could use for the sensor and therefore I didn't know how strong a wave I needed to generate so that I could detect it and therefore I didn't know how big a cylinder I needed nor how fast I had to spin it.
I would have been very disappointed if the universe is filled with something like Higgs Boson. Then I think "mass" could be made from gathering Boson particles, not from what I thought is more elegant mechanisms like "Geon" which is a trapped photon within its own gravity field. If "Higgs Boson" or something like it is responsible, all one has to do is find them like all other elemental particles physicists were looking for in accelerators and still are. I personally would have found no fun in that. When I wrote this, I thought about my adviser. (Couldn't remember his name. He had only one ear lobe.) Fun days.
Dad
You might say it's nitpicking. I say these are pretty different goals. And goals that might not be consistent. And, from an objective standard, if the goal was to win a World Series during this time period, then Billy and the A's were unambiguous failures.
Sure, they were able to win a lot of games. And, they were able to win a lot of games per dollar spent. Some argue this was the goal. But, in reading, watching, and listening, this is not clear.
I have no idea about increased profitability or increased market value. Judging by the empty seats -- rather the tarp covered upper deck -- at the Coliseum, I'm guessing, they failed at the latter potential goals as well.
Statistics: A Sound Tactical Approach
In general, I'm a believer of the approach taken by Beane -- using math and statistics to make objective decisions. Which, lead to good results. Define metrics, test, measure, repeat. If you throw in some intuition and "hunches," I think it works even better. Stuff like Bayesian Inference even allows for this. And, going off the deep end, there's even hope for a science of causation to be even more effective. Thank you, Judea Pearl.
However, in Moneyball, all the great math, statistics, and science seem to be for naught. Why? Because of the lack of clarity regarding a goal. What were Beane/A's trying to accomplish? I have not idea if they were successful. Whether they chose the right metrics. Or tests. How could they without knowing what they were trying to accomplish? (Is it possible that they did know and only I missed the point?)
In the words of Yogi Berra, misquoting Carroll:
"If you don't know where you are going, you will wind up somewhere else."
The good news is that, maybe "somewhere else" is somewhere good too.
What Does This Mean for Silicon Valley Startups?
It seems so obvious. Having a goal is important. It's strategic. However, sometimes we lose sight of this because we get overly wrapped up in the tactics. You know -- why it's important to test and measure. Run that A/B test. Understand your customers. And, the granddaddy of them all -- the importance of the pivot. While these tactics are important, it seems like we should be laser focused on understanding the big goal.
Maybe you measure your company against lots of visitors, big revenue, or awesome user experience. You might be "hitting it out of the park" on these metrics. And, sometimes, you prioritize your actions against these metrics. In the end, however, how do these numbers reflect the progress towards your goal? Or worse, are you spending resources to achieve these metrics and losing sight of the big picture -- your end goal?
Of course, maybe I'm wrong. You could wander around drunk on Burbn, stumble onto some pictures, and then exit for a billion dollars. Then, it doesn't matter what your goal is or was. Without question, I'd say a billion dollars is success.
And, then again, Michael Lewis didn't do so bad for himself either.
(Aside: Here's my naive opinion on what it takes to win the World Series: You need to put the right arms on the mound to beat the best teams in a 5 and 7 game series. Being able to beat a lot of mediocre teams won't get you there, even though you will win a lot of games. Pitching is key. Good pitching costs money. You need the pitchers to win. Thus, beating the best in the World Series costs money...Unless, as Bill Gerth reminds me, you were the 1975 Cincinati Reds.)
"...Sponsor may use the winner's name, likeness, image, voice, photographs, biographical information, address (city and state) and written statements made by the winner about the Sweepstakes and Sponsor for promotional purposes, in all forms of media, in perpetuity and without monetary payment or additional consideration."
Unlike Al Gore, Rick Santorum makes no claims to being the "Technology Candidate." After all, he's not the inventor of the Internet. And, yet his clear Pro-Life stance will certainly impact the world of programmers, technology, and the Internet. While his agenda has yet to be made public, the unspoken word is clear -- He is here to save programmers. To save them from a world lacking morality. A world called "Unix."
The Roots
The beginning of modern programming started basically in the 1960's and flourished in the 1970's. The liberal agenda beginning with the Kennedy administration combined with the birth of modern "Time Sharing Systems" followed by personal computers created a "perfect storm." These decreasingly expensive computational devices empowered Individual, encouraged radical thoughts, and challenged the tyranny of the main frame. The radicals creating Unix had names and faces -- people like Dennis Ritchie, Ken Thompson, and Brian Kernighan followed by Richard Stallman, Bill Joy, Marshall Kirk McCrusick and others. Typically long haired and bearded, these men were out to change the natural order of the time. Could they be trusted? While almost always denied, accusations of being communists were commonplace. Just by looking at at this motley crew, you have to wonder.
Dig down beneath the seamy exterior, their moral fiber is quickly revealed. Clearly radicals, they had their own "Bible" -- a book far different that the Bible known to you and me -- authored by Ritchie and Kernighan.
Because SEO is a long game with risk, we started to think about other ideas. Some of it was obvious. Like affiliate marketing. SEM. Email campaigns. Direct mail. Telemarketing. Some it was absurd. Radio advertising. Creating coupons on the fly for local businesses. Dressing up as a singing chicken delivering a telegram. (I can't remember if this was Mark, Daniel, or Ben.) Give away fishbowls to local merchants (Don't ask). And a bunch of others that were even more crazy. (DM me if you want to know.)
We probably cycled through 500 ideas. Nothing was too absurd.
100 Experiments. 97 Failures. 3 Successes.
We then formulated some hypotheses. Which ideas were truly absurd? Which might work? We weren't certain any of them would work! Ultimately, we decided to execute on 100 experiments to test which ideas were good. We needed to build a machine and culture where we could quickly setup and execute our experiments. For each one, we wanted to do as little work/implementation as possible and spend less than $100. We figured it was no use spending a lot of time or money on a failure. Fail fast, in modern parlance.
Our goal was to find 3 approaches that worked. We figured that three of them would. But the problem was -- it was kinda hard to tell which ones did. It was easy to get fooled by false positives and false negatives. Or maybe sometimes we weren't so rigorous statistically. Or someone wanted an outcome so badly he tortured the data. If I never hear a faulty argument about the importance of the R-Squared being greater than 80%, I won't shed a tear. :-)
Regardless, when we saw a glimmer of hope of an experiment with a good result, we ran with it. There were probably 10 of these. We went deeper. Spending $1000 each. When we whittled it down to three, we spent around $10,000 each.
So, all in the cost to run all the tests to get to something that worked was less than a $100,000. It felt like a pretty good use of money.
3 Successes? Maybe. One Exit? Definitely.
Did we really choose three winners? Were there better ideas that we falsely rejected? It's kind of hard to tell. But we were able to run with 3, in which at least one of the three worked well.
Coupling these with a working SEO strategy, we were able to successfully bootstrap our customer acquisition efforts. 10,000 other steps after executing these three ideas, we guided the company to a successful exit.
Retrospective
Fast forward to 2012. Would this strategy would today? From one perspective, it seems it could. I just read how PunchTab cycled through a bunch of widely different ideas before settling down on the current idea. It also seems to be vaguely compatible with the idea of building a minimum viable product within the context of a lean startup. However, our experiments were narrowly focused around specific customer acquisition goals within a set strategy to win on the local Internet. We weren't experimenting to find the "big idea." Second, we weren't so interested in iterating and refining an idea after an experiment. Either it was working or not, and we were moving on if not. Last the cost of doing an 100 experiments in search of a success was not without cost. At $100,000, if you are early stage, this might not be affordable.
If you are boot strapping, maybe this doesn't work because of the capital requirements. You can't afford to do 100 experiments. With 97 failures. And, raising enough money at this early stage might be difficult.
But for MerchantCircle, this all worked out fine.