Cool Concepts #2 - Devils, Drake, and Levers

Have you ever — thought someone "looks" like a good person?, felt that a task you're working on never seems to end?, questioned our lone existence in the universe?, felt that life is subjectively different for a "special few"?, wondered if there's a possibility to work less and get a lot more delivered? If any of these questions ever crossed your mind or wonder why they crossed mine, read along.

The Halo Effect
The Drake Equation
Leverage
Pareto Principle
Parkinson's Law

The Halo Effect

The Halo Effect is a cognitive bias by which the positive impressions of people, products and brands in one area affect our judgments about those in other areas. A simple example is believing that a "good looking" person is a good person. A more complex example is when we know that a person has one good trait (like trustworthiness) and we tend to believe they have another unrelated trait (good judgment or punctuality) without any actual evidence. This error in judgment reflects one's preferences, prejudices, ideology and social perception. This might make us judge others unfairly and miss out on opportunities.

This bias extends beyond people. This same bias makes people spend more money on products marketed as "organic" even if they are not. In addition to spending, the "organic" label also tends to affect customers' emotional profiling (feeling good about consuming something just because it's organic) and flavor profiling (finding organic products tastier and more desirable). We must remember the fact that "organic" doesn't mean "healthy". Organic candy is still candy and it still has sugar. The same goes for "fat-free", "sugar-free" and "low-fat" products, too. These products might be desirable for one factor, but they aren't necessarily healthy and we shouldn't over-consume them.

Back to the people, this bias can be experienced in evaluating people whom we don't know personally too. Haven't we heard of people rating a political leader higher because of his/her charisma? Though we don't know their exact political skills, we tend to give them a high rating. This can also work in reverse — it's called the Horns effect (imagine a halo or a pair of horns on a person's head to make them seem better or worse than they actually are). The horns effect is when one bad trait of a person affects our judgement about the entire person.

The Halo effect occurs because human perception is a constructive process. When we form our impressions of others, we don't see them objectively. Instead, we construct a coherent story in our minds from what we already know. If we take a moment and think about it, our impression of others builds up the world around us and forms our opinions. To know that this could be biased, urges us to be more objective in our assessments and hopefully reduce this bias.

Research suggests that attractiveness (weight, hair, eye color, etc) might factor in while estimating a person's life success and personality. No wonder appearances are deceptive. One of the main ways to mitigate this bias is called cognitive debiasing, which involves slowing down one's reasoning while evaluating or creating an impression of a person, product or a business. This might help avoid any sudden impressions. Basically, we should take time to form an impression about someone or something.

The Drake Equation

I came across an equation on a vehicle plate in the parking garage of my friend's apartment. I immediately took a picture of it and I wanted to learn about it. It turns out that this equation provides a probabilistic framework for mankind's one of the most baffling and unanswered questions — Are we alone in this universe?

The Drake Equation, as I came to know, gives an estimate of how many advanced, communicative extraterrestrial civilizations are there in the Milky Way Galaxy. This equation was proposed by astronomer Frank Drake in 1961 at a conference organized for the Search for Extraterrestrial Intelligence (SETI) initiative. Agreed as the second most famous equation in science (of course, after Einstein's E= mc²), the Drake equation goes like this:

N=R_* \cdot f_P \cdot n_e \cdot f_l \cdot f_i \cdot f_c \cdot L — Source: https://g.co/kgs/QzMRfQ

N = number of civilizations with which humans could communicate
R_* = mean rate of star formation
f_p = fraction of stars that have planets
n_e = mean number of planets that could support life per star with planets
f_l = fraction of life-supporting planets that develop life
f_i = fraction of planets with life where life develops intelligence
f_c = fraction of intelligent civilizations that develop communication
L = mean length of time that civilizations can communicate

The degree of uncertainty increases as we move to the right of the equation, and our guesses at this point are poor. There are some "best guesses" for these parameters based on a number of calculations — R_* = 10/yr, f_p = 0.5, n_e = 2, f_l = 1, f_if_c = 0.01, and thus N = L/10. So, if we consider that all civilizations become extinct in a decade (L = 10) into achieving radio astronomy, which is considered as the mark of an advanced civilization, then N = 1 (which is mostly unlikely, as we have established radio astronomy long back) and we are alone. However, even if we assume as low as 1% of civilizations learn to live with technology of mass destruction like we do, then N = 1,000,000, and the nearest advanced civilization could be a few hundred light years away.

Whether or not these estimates are accurate, it's still something for us to ponder and realize that we are just specks of dust on a floating blue rock somewhere in space. We are infinitesimally small in the grand scheme of things.

Leverage

Leverage is technically defined as the force applied on an object by means of a lever. Imagine you are applying an input force on some kind of a lever (Effort) and it exerts a bigger output force on the other end of it (Load). Thinking in terms of work, leverage is the ratio between the output (the product of our work) and the input (the time we put in). There are many things that can be leveraged - tools, people, money, products. Let me explain.

Historically, we didn't have leverage. When people chopped wood for 8 hours, they had 8 hours worth of wood. Old school leverage started when capital and labor were introduced. Though these still exist, they are not very effective in terms of cost and permissions.

Labor Leverage:

Labor-based leverage is other humans working for you. It's the oldest form of leverage. Though it maximizes output when work is done by multiple people, it has its downsides:

Cost — Managing people is messy, and you have to pay the people working for you.

Permission — You need to make people follow you by some means i.e., you need their permission to get them to work.

Capital Leverage:

Money is a good form of leverage. If you have money, you can have multiple leverages including labor. Leveraging borrowed capital could be useful in expanding the assets of a firm, expanding businesses and maximizing return on investments. Capital labor also has its downsides:

Cost — You're in debt, and you have to work hard to gather the capital in the first place. You need to find a way to multiply/replicate the money that you collected.

Permission — You need people to lend money, for you to invest or make a product.

The New-Age Leverage:

No marginal cost of replication:

The newest form of leverage is products that have a "build once, sell multiple times" model. This was popularized by the invention of the printing press, where the content (books, newspapers, etc) was created once and replicated with minimal cost of replication. Software is another great example — Software Engineers started to build software once and sold it on the internet millions of times. In this information age, you can do the work once and multiply it once without involving or taking money from anyone.

Things like coding, making apps, recording podcasts, writing books/blogs/tweets, making youtube videos, etc have almost no cost of replication. You do the work once, publish it on the internet and it could be consumed millions of times. The internet is a serendipity vehicle which takes your content to the unknown corners of the world and creates chances for people to stumble upon it.

Permissionless:

This type of leverage is also permissionless. You don't need anybody's permission to develop an app/software, write a book, make a youtube video or to start a newsletter. All you need is a computer and you're good to go.

With this kind of leverage, I think it's safe to say that we live in an age of infinite leverage. The leveraged people have the means to build and scale their products infinitely. Recently, I was very glad to see the same street vendors who used to scream their throats off to sell their products when I grew up, leveraging technology to record the same phrases they used to yell and play it on loop.

I hope we can get to a point where we equalize this leverage for all classes of society so that everyone will have the tools (a computer/smartphone and access to the internet, to the very least) to utilize this leverage in the information age. This will create an egalitarian society. The instance with the street vendors gave me a ray of hope.

Pareto Principle

The pareto principle states that roughly 80% of consequences come from 20% of the causes. It's also called the 80/20 rule or the law of the vital few. An Italian economist Vilfredo Pareto, first noted this distribution in 1896, that 80% of the land in Italy was owned by 20% of the population. Mathematically known as the Pareto Distribution, this can be observed in many phenomena in our society. This principle is used to denote that society is not built equally and things are not distributed evenly. Here are a few examples:

Wealth: 80% of the world's income is controlled by 20% of the population.
Taxation: In the US, 80-90% of federal income taxes are paid by the top 20% of the earners.
Sports: 80% of the wins/points are accumulated by the top 20% of the athletes/teams.
Technology #1: Microsoft noted that 80% of the crashes in Windows and Office are caused by 20% of the entire pool of bugs identified.
Technology #2: It was also discovered that in general the 80% of a certain piece of software can be written in 20% of the total allocated time. Conversely, the hardest 20% of the code takes 80% of the time.
Technology #3: 20% of smartphone apps are used 80% of the time.
Hazard management: In occupational health and safety, 80% of workplace injuries have been observed to have been caused by 20% of the hazards. By identifying and targeting those 20% of the hazards, safety professionals can minimize the number of injuries.
Healthcare: In the US, 20% of patients utilize 80% of healthcare resources.
Grocery: 20% of the grocery items amount to 80% of the bill.
Business: 20% of the customers generate 80% of the revenue.
Resources: In a home or office, 20% of the carpet typically receives 80% of the wear and tear.
Human Resources: 80% of a corporation's profits are driven by 20% of its employees.
Personal Finance: 80% of your expenses come from 20% of your purchases.

When analyzing a project or an outcome or a situation, it is useful to do a Pareto Analysis to determine if the 80/20 split exists. However, this has its limitations:

The Pareto principle only focuses on past data. Something that happened in a certain way in the past doesn't mean the pattern will continue in the future. It doesn't account for this possibility.
The Pareto principle is quite helpful in identifying patterns and causes, but it does not offer a solution.
The Pareto principle is only an observation, but not a law — though it is prevalent in many scenarios across the board, it cannot be applied to every scenario.

Parkinson's Law

The Parkinson's Law states that "Work expands so as to fill the time available for its completion." If a task is supposed to be finished in 2 weeks, it will take 2 weeks. If the same task is set to be finished in two days, it will get done in 2 days.

The idea behind this law is that we usually plan based on how much time we have to finish the task. Based on the deadline, we make choices and tradeoffs to fit the task. Please note that this should not be used as a rule of thumb to set unreasonable deadlines. A skyscraper can't be built in a month to fit Parkinson's Law. That's why it's not a "law" per se, and it should be treated like a productivity thought experiment from an organizational standpoint — "What would it look like if we were to finish the project/task on a very aggressive timescale?" Answering this question would help us discover techniques and frameworks to finish the task in less time.

This could also be used as a personal productivity hack. Let's say you have a task to be completed by the end of next week. If you assume the actual deadline, according to Parkinson's Law, you will keep doing it until the end of next week. However, let's say you fix a mental deadline for yourself that you're going to complete it in the next 2 days. Thinking this way will let you "finish" the task in 2 days. The output at the end of 2 days might not be as good as expected, but now you have done the task to completion and you can set a mental deadline of another two days to make it better. Now, in 4 days you have finished the task satisfactorily. You can expand this idea to longer tasks and deadlines as well. Of course, it's not applicable in every single scenario, but this is a hack to finish some dragging tasks quickly and get out of procrastination.

What are some cool concepts that you came across recently? I'm always looking to learn. You know where to find me. Thanks for reading. Peace out!

Cool Concepts #2 - Devils, Drake, and Levers

The Halo Effect

The Drake Equation