Saturday, September 20, 2014

Astoria: John Jacob Astor and Thomas Jefferson's Lost Pacific Empire: A Story of Wealth, Ambition, and Survival

Astoria: John Jacob Astor and Thomas Jefferson's Lost Pacific Empire: A Story of Wealth, Ambition, and Survival

The global business ambitions of John Jacob Astor collide with the reality of one of the corners of the earth farthest from European civilization.

Launched in 1810, the idea was to create the seed of a colony on the west coast of North American - which belonged to no country in that day and age - to take advantage of the fur trade, and, perhaps, to found a new country or further the reach of the nascent United States.  

The expedition was not the success Astor had envisioned, and it would be nearly another 30 years before the Oregon Trail came to see larger numbers of emigrants headed for the Oregon territory.

The book was especially interesting for me, having been born and raised in western Oregon.  As something of a failure, the expedition doesn't get mentioned nearly as much as the Lewis and Clark expedition, or the Oregon Trail of later years.  But it's a fascinating bit of Oregon history.  Part of what did not work out for the expedition was the horrible, gray, damp weather that dominates the northern Oregon coast during winter.

Indeed, the Spanish, who were already in California, apparently were not much interested in the area to the north:
Spaniards first had sailed northward from their colonies in Mexico as far as today’s Oregon in the 1600s. But the cool, wet, rugged Northwest Coast inhabited by Indian tribes living in wooden longhouses and traveling in large cedar canoes didn’t compel them like the benign climates and monumental, gold-encrusted civilizations of the Aztecs and Incas far to the south.
The expedition was a two-pronged approach, with a boat going around Cape Horn and an overland expedition.  It took the overland expedition more than a year to finally reach Astoria, after much wandering.  As was often the case with the earliest white explorers, they very likely would have all perished had it not been for the kindness and hospitality of local Indians at various points on their route.

Without spoiling the story, there was also a fair amount of conflict with other Indian groups.

When both groups had finally arrived at their destination, and settled in, their existence was a bleak one:
Then imagine the rude shock of arrival in the coastal winter or early spring: It’s cold, it’s raining—as it is nearly two hundred days a year at the mouth of the Columbia; the infinite gray coastline stretches away, backed by the thick, dark rain forest—soggy, choked with rotting cedar logs, prehistoric sword ferns, and the dark columns of towering fir and spruce whose outstretched limbs are draped with lichen in giant, ghostly cobwebs. This was a far cry from the euphoric expanses and brilliant starry skies of the high plains, or even the snowy sparkle of the Rockies.
and
...set the mood of life on the Northwest Coast—the anxious, paranoid, exposed life in the dripping rain forest, along the swashing tidal rivers and surf-pounded headlands. This was not a warm, friendly place. In this dank, dark setting, fringed by violent death, personalities like McDougall spied malevolence lurking behind every tree.
As a now former resident of western Oregon, I think these descriptions do the place justice: if you like the sun and aren't a fan of damp weather, it's not a good place to be!

What put the nail in the coffin of the attempted settlement was the war of 1812 and the arrival of a British/Canadian group who (peacefully) took control of the fort and oversaw it for the next 30 some odd years, when the US/Canadian border was settled at its present location.

A few of the French-Canadian members of the expedition, including Marie Dorion, settled in the upper Willamette valley, becoming some of the first non-natives in the area.

An interesting footnote is that ships going around the horn would, rather than crawl up the coast, go to Hawaii and then double back.  The seagoing expedition took on some Hawaiians as crewmen on their way to Oregon.  One can only imagine the shock of going from a tropical paradise to the cold rain of the Pacific Northwest.

I found the book to be a very interesting read and would recommend it, especially if you have any connections to the places involved.


Return of the Outlaw & West of Vermillion

Return of the Outlaw and West of Vermillion

I like to read a western from time to time, to relax and think about a world about as far from technology as possible. C.M. Curtis has written a fine pair of westerns, which are disappointingly hard to find these days.

The good guys are good, the bad guys bad, and there is not a lot of gray in between.  The plots are long and woven around multiple characters, which keeps the books interesting.   Both are set in indeterminate places, with Return of the Outlaw somewhere hot and dry with many Mexican inhabitants, and West of Vermillion seemingly somewhere in the Rockies.

Of the two, I think I prefer West of Vermillion in that it's a bit more complex. Return of the Outlaw is a story of bad guys, and the good guy "who they done wrong" who reclaims what is rightfully his.

If you don't care for westerns, I wouldn't bother, but if you do, these are worth your while.

Wednesday, September 10, 2014

Made to Stick: Why Some Ideas Survive and Others Die

http://www.amazon.com/Made-Stick-Ideas-Survive-Others/dp/0739341340?tag=dedasys-20

This book had been on my wish list for a while, but I never quite got around to buying it.  On the recommendation of Rob Walling, I finally got around to reading it, and I wish I had done so earlier: it's got lots of great advice on how to more effectively communicate an idea in a way that people will remember it.

The book revolves around a checklist for really sticky ideas: "SUCCESS"


  • Simplicity is about boiling your idea down to the core element.  The authors don't claim this is easy, but it is necessary in order to effectively get something across.
  • Unexpectedness gets your attention and makes you sit up and take notice.
  • Concrete: "sticks to your mind like crazy glue" provides you with something tangible, if not real, that you can picture.  "Improves memory retention 28%" is, on the other hand, very abstract.
  • Credibility is how we get people to believe our ideas, perhaps with an authority figure, or with details that make it more real.
  • Emotions are really important for convincing people - even those of us who want to believe we make rational, logical decisions
  • Stories are much easier to recall and pass along than a series of abstract facts.  Storytelling has been part of the human experience for thousands of years.  Going over a story in your mind also helps someone prepare to act.
That's the really brief version anyway, but each chapter is fairly rich in details and suggestions about the different ways each of these factors comes into play.  This book definitely passes the "business book test" in that way - you'd actually lose out on quite a bit by reading a summary rather than the full book.  Here area few quotes:
This is the Curse of Knowledge. Once we know something, we find it hard to imagine what it was like not to know it.
This point is visited several times, and it's an important one: once you know a lot about something, it's had to remember what it was like to not know all about it.  This can make it very difficult to communicate well with people who don't have all the background knowledge in their heads that you do:
One of the worst things about knowing a lot, or having access to a lot of information, is that we’re tempted to share it all.
I know I'm guilty of that - trying to shotgun blast people with a huge spray of information.  It's too much though, and people will forget all of it.  If on the other hand, you can craft a simple, memorable message that gets to the heart of what you are trying to pass on, it's much more likely to stay with people.

Thursday, August 14, 2014

Roadside MBA: Back Road Lessons for Entrepreneurs, Executives and Small Business Owners

http://www.amazon.com/gp/product/B00FPQCYYY/ref=kinw_myk_ro_title?tag=dedasys-20

Business books about Big Companies and how they operate are next to useless for many of us.   That's what I liked about this book - it's about small companies doing a variety of things and the lessons that can be drawn from them.

The selection of companies, indeed, was great.  Too often business books focus on large corporations that, realistically, none of us will ever come close to running.  Small companies doing their own thing, though?  That is something many of us can aspire to.

"Mazzeo's law" was introduced early in the book, and I immediately liked the thinking behind it: most things don't have easy, clear-cut answers.
Mazzeo’s Law The answer to every strategic question is “It depends.” Corollary 1 The trick is knowing what it depends on. Corollary 2 If the answer to a question isn’t “It depends,” then it’s not a strategic question.
At times the "chatter" about the economist authors and their own lives is a bit more than I would want - it could have been edited down a lot.  Another thing that might have made the book better, although it would have been harder to accomplish, is to include a few case stories about failed businesses, and why they went under.

In any event, there are a lot of interesting lessons to be had throughout the book, and a summary wouldn't do them justice.  Not all the concepts discussed are applicable to every small company, but there's a nice variety.  Here is the table of contents, to give you an idea of the subjects covered:

  • Chapter 1: Scaling a Business
  • Chapter 2: Establishing Barriers to Entry 
  • Chapter 3: Product Differentiation 
  • Chapter 4: Setting Prices 
  • Chapter 5: Managing Your Brand 
  • Chapter 6: Negotiating Effectively 
  • Chapter 7: Hiring 
  • Chapter 8: Incentives for Employees 
  • Chapter 9: Delegation 
  • Chapter 10: Battling the Big Boys
Whatever kind of business you are in, much of the material will, if nothing else, stimulate some thoughts about how these ideas apply to it.

Monday, June 30, 2014

Think Like a Freak: The Authors of Freakonomics Offer to Retrain Your Brain

http://www.amazon.com/dp/B00BATINVS/?tag=dedasys-20

Freakonomics was the book that kicked off a lot of "pop economics" books by looking at a variety of subjects in a way that was new to many people, taking on various subjects such as the declining crime rate and its relation to abortion, sumo wrestling match fixing and how much drug dealers earn.

Think Like a Freak is the book that goes beyond the numbers and anecdotes from the authors' other books, and talks about how to view problems in a similar way, from another point of view.

Some of their suggestions:


  • Try and put aside your feelings when thinking about things.  If you're already sure that you possess The Right Answer, then you're not likely to think about the problem very clearly.
  • Sometimes it's better to admit you don't know:
The next time you run into a question that you can only pretend to answer, go ahead and say “I don’t know”—and then follow up, certainly, with “but maybe I can find out.” And work as hard as you can to do that. You may be surprised by how receptive people are to your confession, especially when you come through with the real answer a day or a week later
  • Children often think of things with no preconceived notions.  This is often a helpful frame of mind for considering problems.
  • Incentives matter.  This is something pretty much any economist will tell you.
  • Revealed preferences can tell you a lot... if you can find a way to get people to reveal them.  One of the stories here is about Van Halen and brown M&M's: http://www.snopes.com/music/artists/vanhalen.asp
  • Being persuasive is important to accomplish things - it's not enough to be right.  You also have to convince other people that you're right:

    "Sure, it’s important to acknowledge the flaws in your argument and keep the insults to yourself, but if you really want to persuade someone who doesn’t wish to be persuaded, you should tell him a story"
  • Sometimes, it's best to quit rather than doggedly pursue something that's not going anywhere.  This revolves around the sunk cost fallacy: http://en.wikipedia.org/wiki/Sunk_costs#Loss_aversion_and_the_sunk_cost_fallacy - although naturally it's not easy to tell when you should be persistent and when giving up is the best idea.
Some of the quotes I appreciated in the book:

When asked to name the attributes of someone who is particularly bad at predicting, Tetlock needed just one word. “Dogmatism,” he says. That is, an unshakable belief they know something to be true even when they don’t. Tetlock and other scholars who have tracked prominent pundits find that they tend to be “massively overconfident,” in Tetlock’s words, even when their predictions prove stone-cold wrong. That is a lethal combination—cocky plus wrong—especially when a more prudent option exists: simply admit that the future is far less knowable than you think.
This makes a lot of sense to me.  I think the less we are in the business of trying to predict things, the better off we are.  The future is complicated, and there are so many ways things can leap off the track you imagined they were on.

On  incentives:

Why do some incentives, even those created by smart and well-intentioned people, backfire so badly? We can think of at least three reasons: 1. No individual or government will ever be as smart as all the people out there scheming to beat an incentive plan. 2. It’s easy to envision how you’d change the behavior of people who think just like you do, but the people whose behavior you’re trying to change often don’t think like you—and, therefore, don’t respond as you might expect. 3. There is a tendency to assume that the way people behave today is how they’ll always behave. But the very nature of an incentive suggests that when a rule changes, behavior does too—although not necessarily, as we’ve seen, in the expected direction.

and

  1. Figure out what people really care about, not what they say they care about.
  2. Incentivize them on the dimensions that are valuable to them but cheap for you to provide. 
  3. Pay attention to how people respond; if their response surprises or frustrates you, learn from it and try something different.
  4. Whenever possible, create incentives that switch the frame from adversarial to cooperative.
  5. Never, ever think that people will do something just because it is the “right” thing to do.
  6. Know that some people will do everything they can to game the system, finding ways to win that you never could have imagined. If only to keep yourself sane, try to applaud their ingenuity rather than curse their greed.
I'm a fan of economic thinking, so I found the book to be a good read, especially since it doesn't really deal with economics as such, but as part of a way of thinking about many things, some of which might not see the domain of economics.



Sunday, April 27, 2014

The Undercover Economist Strikes Back: How to Run-or Ruin-an Economy

http://www.amazon.com/Undercover-Economist-Strikes-Back-Ruin-ebook/dp/B00DMCV624/ref=tmm_kin_swatch_0?_encoding=UTF8&sr=&qid=&tag=dedasys-20

I enjoy Tim Harford's writing, especially his first book, "The Under Cover Economist" but was a bit reticent to get this one. Macroeconomics seems like something that we don't really have a good handle on yet, in many ways, a fact that is indeed acknowledged in the book, and it tends to be a bit more abstract than microeconomics.  However, I needn't have worried: the pleasant writing style makes the book a quick and pleasant read, and touches on a number of topics that are often encountered when reading about the economy and politics.  In this sense, the book is a pretty good tour of important topics in macroeconomics.  Having read this and that over the years, many the topics were not really new to me, but it was nice to see them covered in a fairly direct, neutral way rather than simply absorbing them in context.

While fairly neutral in terms of mainstream economics, the author is certainly opinionated:

The world is full of people who will tell you that there is. Tie your currency to gold! Always balance your budget! Protect manufacturing! Eliminate red tape! That kind of thing. You can safely ignore these people. Anyone who insists that running a modern economy is a matter of plain common sense frankly doesn’t understand much about running a modern economy.
This is probably the sort of opinion lost on the people who most ought to take it to heart, though.

"We don't have all the answers" is something that becomes quite clear in the book, but we do our best to keep improving on what we do know, and to use that effectively with regards to the economy.  You can't run experiments on an economy, except by accident, and there are always many confounding factors in play at one time, making it difficult to understand what is affecting what.  This is a difficulty microeconomics faces, but it's exacerbated by the scale that is the scope of macroeconomists.

Some topics touched upon include inflation, employment, central banks, labor markets, and inequality.  There is also a lengthy section of the book dedicated to defending the use of GDP to measure an economy, in that alternatives are mostly worse, and pushed as part of a political agenda.  Also, broadly, people who have more money are happier:
Justin Wolfers, told me that the relationship between life satisfaction and income is “one of the highest correlations you’ll ever see in a cross-country data set in the social sciences, ever.”
As a resident of Italy, with a first-hand view of the stagnant economy, the brief comment on the employment model here seems pretty obvious.... outside Italy at least:
What’s pretty clear is what doesn’t work: the Mediterranean model of Spain, Italy and Greece provides little help to young people and extravagant protection to people with permanent contracts.
The notion that failure is important for growth is also touched on:
But corporate failure isn’t the cause of economic trouble—it’s the process by which badly managed companies are replaced by more productive competitors.
This is something that often involves very difficult changes for those involved, but ultimately leads to a healthier, more productive economy.  The amount of money that Italy has sunk into Alitalia comes to mind.

The "but GDP growth can't continue forever!" argument is also faced:
I fully agree with the environmentalists who worry that we cannot continue consuming more and more water, spewing out more and more carbon dioxide and burning more and more coal. The problem comes if we then leap to the conclusion that the economy itself cannot keep growing. It doesn’t follow.

...

A lot of what’s going on with GDP growth is not that more materials are being used, but rather that much the same materials become more valuable as they are used in a better-designed object

...

The economy has been dematerializing: more and more of what we consume in rich countries requires fewer resources because of more efficient technology (LEDs instead of incandescent bulbs; laptops instead of mainframe computers), or because the value is mostly in the esthetic design (haute couture, haute cuisine), or even because—like the e-book you may be reading or the audiobook you downloaded—the product is digital and has almost no physical form at all
 If you're already familiar with macroeconomics, this book will be too basic, but for anyone else not familiar with the subject, I would happily recommend it.  The conversational style of the book, and the author's able writing make a good introduction to what could be a dry and boring subject in the wrong hands.