The Story of Write of Passage

It’s the one-year anniversary of Write of Passage. One year ago, I flew from New York to Mexico City for 10 days of filming and curriculum development. Since then, I’ve taught more than 500 students from more than 40 countries. Here is the story of how I built the course and the lessons I’ve learned from the first year of running it. 

A course called Building a Second Brain unlocked my passion for writing, which became the cornerstone of Write of Passage. The course, taught by Tiago Forte, transformed my relationship with information. In just five weeks, I went from fighting a tsunami of information to surfing the waves of information overload. I went from fighting the accelerating digitization of the world to working with the computer in my pocket to improve my thinking. And I went from fighting the evaporation of memory of human memory to systematically collecting the best ideas I consumed. 

My mentality towards ideas shifted. Growing up, I was a terrible student. I graduated high school with a 2.8 GPA, college with a 2.9, and my SAT scores weren’t any better. As my father said to me recently: “You were the kind of kid who started his homework in the back of the car on the way to school.” Two years before, I earned a C in a college writing course. Armed with Tiago’s note-taking system, my writer’s block disappeared and my speed of creativity exploded. In a matter of six months, I launched a weekly newsletter called Monday Musings and published essays like The Algorithmic Trap and What the Hell is Going On. 

As my online audience started to grow, financial advisors reached out for help building theirs. As investing is as close as you can get to academia inside the business world, the finance industry has long had a writing-heavy culture, spurred by famous memos that double as marketing vehicles from top investors like Howard Marks and Warren Buffett. Lured by the success of writers like Morgan Housel and Nick Maggiulli, investment managers hired me to outline their online growth strategy.

Even though I found clients, I despised the repetition of consulting and the demands of client service. Clients had the same problems, so I kept repeating myself when I offered the same solutions to those problems. 

In November 2018, I tweeted my goal to help 1,000 people start writing in 2019. I said I would create a course to show people the roadmap, and I asked interested readers to share their email. Within 24 hours, I received hundreds of responses from people on every continent. For the first time, I knew there was a demand for the course. But now, I had to create it.

Later that month, I pitched Tiago on co-creating an online writing course. We’d market it as a sequel to Building a Second Brain. I’d seen firsthand that his most successful students used his system to share ideas, so my course would give students a blueprint to become prolific creators. Moreover, I’d developed a philosophy of living on the Internet. I’d met friends on the Internet and used it to attract an outstanding roster of guests on the North Star podcast. The pitch lasted less than five minutes before Tiago said yes. Jazzed by the opportunity, we agreed to film the course in Mexico City and launch it in mid-2018.

But I had a problem. I didn’t have the money to film, edit, and produce the course. I was stuck. I felt like I was standing in mud at the edge of a canyon too wide to jump across, with no bridge to walk to the shining terrain on the other side of the valley. 

Then, I received an unexpected gift. Tyler Cowen, one of my all-time favorite writers, gave me an Emergent Ventures grant to fund the Write of Passage production costs. With it, he built the bridge I needed. The money removed the downside risk of starting the course and paid for me to fly two film producers from Los Angeles to Mexico City, where they worked night and day to film seven pre-recorded modules we still use in Write of Passage today. Without Tyler’s grant, none of this course would have been built. 

 

 


Filming the recorded modules with Tiago in Mexico City

Filming the recorded modules with Tiago in Mexico City

 

Both Tiago and myself had been writing online for years, so all our marketing was organic. No Facebook ads. No affiliate links. Tiago told his alumni about the course and I emailed my email list of ~5,000 people about it. 

We launched the course in April (two months after filming it) with an inaugural price of $600 and ~150 students. Even though we earned more than $200,000 in profit from the first two cohorts and saw students like Packy McCormick, Sid Jha, and Shanu Mathew succeed as up-and-coming online writers, I knew there was room to improve the student experience. 

A student named Will Mannon, who participated in the first and second cohorts, called me with a list of suggestions. I was so impressed with his drive and charisma that I hired him as a course manager for the fourth cohort. His responsibilities included restructuring the course curriculum, redesigning the student onboarding experience, creating a master feedback page with alumni suggestions, leading feedback sessions, and improving instructor-to-student emails. 

Will was working for a computer security company at the time, so I hired him to work part-time. The contract said he’d work for 10 hours per week, but he blew that number out of the water. He spoke on the phone with almost every Write of Passage student, wrote outstanding follow-up emails after every session, and built camaraderie among his local community of Los Angeles-based Write of Passage students. Moreover, Will’s work allowed me to focus on marketing and improving the course instead of running operations and customer support. Halfway through the cohort, Tiago and I called him to formally offer him a full-time position as the director of student experience for Write of Passage and Building a Second Brain.  

He jumped on the opportunity. Once Will signed the contract, we both flew to Tiago’s hometown of Mexico City where we planned for 2020. We mapped out our yearly plan and set our strategy for launches, operations, and course improvements. We agreed to redesign the student directory, improve the curriculum with Saturday live writing sessions, and launch an ambassador program for some of our top alumni.  

We decided to begin our first Write of Passage cohort of 2020 on February 19. The launch was a success. We raised the price by 50% and still increased the number of new student sign-ups: 130 new students and 68 returning alumni signed up for a total of 198 students. Best of all, the business profits allow us give case-by-case scholarships to people like young students and citizens of countries with weak currencies (Write of Passage costs more than one year of study at one of India’s top business schools).

For the fourth cohort, we added an initiation week where students can meet their course-mates at the beginning of the course (while the energy is still high). We also recruited 10 alumni mentors who will support and mentor new students throughout the course. 


What I’ve Learned

Build the product you wish existed: I’ve never done any market research for this course. Instead, I followed my intuition and built the course I wish existed when I began writing. Write of Passage is the classic example of an Audience-First Product. I attracted an audience before I built the product instead of building the product before attracting an audience. The more your audience overlaps with the product you create, the better. If you want to invent something transformative, ignore the data and build a product you wish you could use. 

If you want to build a business, build an audience first: I wrote online for 3.5 years before launching Write of Passage. In that time, my email list of almost 20,000 people has become my most important professional asset. More than 1 million people visited my website in 2019, many of whom read the entirety of long-form articles like Peter Thiel’s Religion and What the Hell is Going On. Because of that organic traffic, I can grow the business steadily without paying for acquisition or diluting the quality of the student body. 

If you want to start an online business in the future, start writing now and don’t pander. Write about what you’re interested in. By doing so, you’ll attract a group of like-minded people who share your values and interests. As you keep writing, you’ll identify opportunities to launch a product for your audience and guarantee instant demand for it. 

The student experience is the most important variable: For high-end products like Write of Passage, word-of-mouth is the best advertising channel there is. Morgan Housel once wrote: “Marketing is increasingly cheap. Trust is increasingly expensive.” You can buy attention, but you can’t buy trust. Building a great product is the most sustainable way to build trust. From cohort-to-cohort, I expect an increasing number of students to sign up for the course from a friend’s recommendation, and if those students enjoy the course, they’ll recommend it to their friends and spin the marketing flywheel. 

Online courses don’t benefit from credentials or hold the prestige value of an accredited university. Instead, they must attract students by delivering an exceptional product. That’s why improving the student experience and the back-end operations is my number one priority for the foreseeable future. 

Fortunately, with testimonials like these, we’re off to a good start.

 

 


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What’s Next? 

I’m in this for the long-haul. The business is already profitable, and I have no plans to sell it. Moreover, I’m going to keep bootstrapping the business. I don’t want to take any investor money because I don’t want to justify my decisions to any stakeholders except for my students. That way, I can follow exciting but unproven paths with payoffs that are hard to quantify, such as launching the Write of Passage Fellowship or Write of Passage For Kids, which will launch this summer. For example, I’ve ignored the conventional wisdom to invest in affiliate marketing and Facebook advertisements. 

The Internet isn’t just a technology. It’s a way of life. Software impacts every aspect of human life, and people who can best leverage the Internet are well-positioned for the coming decades. I want Write of Passage to evolve beyond a writing course and become a social club too. If the 2010s were about meeting dates online, the 2020s will be about meeting friends online. Write of Passage attracts a tremendous roster of ambitious students who radiate intellectual curiosity. 

Long-term, I want to enable life-long friendships, personal growth, and use the Write of Passage ecosystem to help my students build profitable businesses. As they do, they’ll become citizens of the Internet and acquire the necessary skills and relationships to thrive in the 21st century.  

 

My Principles of Company Building

Here’s a list of 20 values I’m going to remember as I build Write of Passage.


  1. Stay nimble: I want to keep the business small. I want to have a personal relationship with everybody I partner with. I have no plans to IPO or sell the business, so I’m going to build the kind of company I want to run for decades. The business must be a joy to operate. It should be challenging, yet meaningful. That way, it can become a compounding machine.

  2. Experiment: We pursue a collection of projects with big upside and low downside. These experiments are low-cost and low-risk because they are independent from the core business and do not threaten its survival.

  3. Do what’s interesting: Rationality is a tool for optimization, not invention. I follow the compass of maximal interestingness. I do boring tasks, but only when I absolutely need to. For example, I’ll try every job myself before I hire somebody else to do it. That way, I can familiarize myself with the work, which will help me assess the quality of an applicant, understand the business, and lead my team. In general, I only work on projects that excite me and spark conversation, and never work on boring projects for an extended amount of time.

  4. Hire when it hurts: Resist the temptation to hire people. If there’s a problem, I try to solve it myself. If I need help with something, I look for a plug-and-play software product or build a checklist for a personal assistant to execute.

  5. Quarterly meetings: I tend to underestimate the benefits of planning. Commit to quarterly meetups to reflect and plan. Divide projects into small, week-by-week chunks. I check-in every week to confirm progress, but I avoid unnecessary meetings at all costs.

  6. Weekly planning and reviews: Every Monday, we write about our goals for the week by answering: “What do I plan to accomplish this week?” It focuses on the big-picture plan without all the individual pieces. Then, we write a weekly review at the end of every week where we answer: “What did I accomplish this week? What went well? Where is there room for improvement?”

  7. Knowledge management: Personal and organizational knowledge management is a competitive advantage. Everybody in the business must be an expert on our shared knowledge base, contribute to detailed standard operating procedures, and develop their knowledge management system. New hires are expected to learn Tiago Forte’s knowledge management system and absorb his methods of working. This is priority #1 for new full-time hires.

  8. Build once, benefit forever: I make things that stand the test of time. I only publish articles that will be relevant in ten years. Inside the business, I build re-usable systems that I can share with students, readers, and friends of the company.

  9. Differentiate: The economy is bigger than you can possibly imagine. Avoid competition. I pick distinct slices of the economic pie, define my vision for improving it, and build a product unlike anything else on the market. Differentiation is free marketing, especially online.

  10. Share our story: Everybody in the business is encouraged to write online. By sharing our knowledge, we help other people build their businesses and build a distribution advantage for ourselves. By sharing valuable information, we attract loyal students and employees.

  11. Teaching is marketing: We open-source our strategy. First, we learn as much as we can. Then, we share the best of what we learn. Instead of buying attention with advertisements and salespeople, we build loyalty by teaching. We attract like-minded people, build trust at scale, and create serendipity for ourselves.

  12. Community effects: Don’t just build products. Build communities. Like Network Effects, communities get exponentially stronger when the right kinds of people join. We measure our success by the number of friendships we create by taking the course and writing online.

  13. Remote-first: We hire from a global pool of talent and find employees ourselves. We look for under-rated signals of ability, such as well-written personal blogs. People find us by writing online, taking our courses, and pursuing their craft with soul, spirit, and tenacity.

  14. Write it up: Thinking well is a competitive advantage for our company. We write long-form to improve the rigor of our thinking, and never use slide decks. We don’t discuss new initiatives until we’ve written about them. The more we write about our thinking, the farther our thinking will travel, and the better our decisions will become. And we publish our best thinking in public.

  15. Work with obsessives: We want to partner with artists — high-agency dreamers with loud imaginations and bold beliefs about the future. We give them the freedom to eat, sleep, and breathe their craft with vigor. Instead of work-life balance, we pursue work-life integration.

  16. Software-first: We live in the Age of Leverage. Information spreads at zero-marginal cost so that you can reach anyone on Earth with an Internet connection — 24/7. We embrace the gifts of software and smartphones, and use them to create serendipity and economic opportunity.

  17. Profit from the start: Cash is the blood of a business. Profit allows us to treat employees exceptionally, enjoy running the business, and reinvest in it in service of our students. When we launch a new venture, it should have a clear path to profitability.

  18. Remember the Deli Shop: The workers at a good deli like Zingerman’s in Ann Arbor, Michigan know your name and remember your order. In addition to quirky decorations and memorable names for their sandwiches, they treat customers well and assume long-term relationships with them.

  19. The Internet Arbitrage: Our business model is predicated on people’s inability to wrap their heads around the scale of the Internet. Others understand this intellectually, but we understand it experientially. We expect this delta to increase over time, especially as the size, loyalty, and quality of our audience improves.

  20. Citizens of the Internet: The Internet isn’t just a new technology. It’s a new way of life. Like electricity in the 20th century, software in the 21st century will impact every aspect of human life. With software and education, we help people become citizens of the Internet.


News in the Age of Abundance

I recorded a behind-the-scenes video of writing this essay, which you can watch here.


The news is just like cereal.

Even though cereal is now viewed as over-processed and sugary, it was once viewed as a health food. Americans heard about the health benefits of cereal and ramped up their consumption. From the beginning, companies made heavy investments in advertising cereal because most people eat the same breakfast every day.

Thus, just as readers are loyal to news sources, consumers are loyal to their favorite breakfast cereals. And like news, consumers inhale cereal during the frantic rush before work. Even if they aren’t the healthiest options, they’re cheap and easy to consume.

Marketers promoted the benefits of cereal with slogans like “breakfast is the most important meal of the day.” Similarly, news organizations position themselves as an irreplaceable daily habit and with slogans like “Democracy Dies in Darkness.” While the Romans believed it was healthiest to eat only one meal per day and our ancestors only heard about major events, but we have been trained to be constant consumers, so we eat too much food and read too much news.

In addition to advertising how fast you can consume their newsletters with headers like “all the news you need in three minutes or less,” they promote the benefits of making news consumption a routine. That way, you can be “well informed.”

Both cereal and the daily news began as well-intentioned efforts to improve American lives. But just as cereal turned into sugar for the body, news turned into sugar for the mind.


The Roadmap 

My question: Why can’t the news keep us informed, and how should we respond?

I’ll answer this in the following structure: I’ll start with the history of two mediums: newspapers and television. With newspapers, I’ll discuss the rise and fall of geographic monopolies, and with television, I’ll discuss the shift from broadcast television to cable. I’ll highlight the three most important lessons from both mediums. Then, we’ll turn to Internet news. I’ll talk about the Triangle of Information Flow, the relationship between amateur bloggers and professional journalists, and the problems with subscription media. Then, I’ll turn to the problems of constant consumption across media platforms. And finally, I’ll introduce the Paradox of Abundance and tie the threads of food, news, and information together.

Pillar 1: A History of Newspapers

  • How Newspapers Built Their Geographic Monopolies

  • How Newspapers Lost Their Geographic Monopolies

  • Three Lessons from Newspapers

    • Business Models Matter

    • Distribution Shapes Coverage

    • Fact-Checking and Russell Conjugations

Pillar 2: A History of Television 

  • Rise of Cable Television

    • Television’s Grip on Opinion and Advertising

  • Three Lessons from Television

    • The Overton Window

    • The Explosion of the Soundbite

    • Common Knowledge and the Benefits of Advertising

Pillar 3: News on the Internet 

  • The Triangle of Information Flow

  • Friends and Enemies

  • Problems with Subscription Media

Pillar 4: Problems of Constant Consumption Across Mediums

  • Pseudo News Fills the Cycle

  • The Negativity Bias

  • False Urgency: 24/7 News

  • Result of False Urgency: Noah Effects vs. Joseph Effects

  • Information Overload: The Illusion of Knowledge

  • Information Overload: The Paradox of Abundance

Healthy News Consumption Is Possible

  • Track What You Consume

  • Focus on News That’s Close to Home

Information Is Food

 

Pillar #1: A History of Newspapers

How Newspapers Built Their Geographic Monopolies

Information was once expensive to produce and distribute. Text was always cheap and easy to produce, but until the Internet, writers couldn’t easily distribute those words.

The cost structure of a traditional print newspaper has high fixed costs and low marginal costs. The high fixed costs come from paying salaries, building the brand, and setting up the manufacturing line. But once the system is set up, purchasing the paper and ink required for an additional newspaper is cheap compared to the cost of building printing presses, purchasing delivery trucks, and hiring local reporters.

In the market for words, local newspapers had little competition for the majority of their existence. Most cities had one or two major newspapers, but big ones like New York and San Francisco had a few more. Small-town families who subscribed to national newspapers like USA Today and The New York Times also read their local newspapers¹

And yet, some of the intra-city newspaper battles were ferocious. At the end of World War II, New Yorkers didn’t know if The New York Times or International Herald Tribune would emerge as the city’s top newspaper. In the heat of rivalry, the Times added commercial listings to the front page of its newspaper with a focus on New York City garment merchants. Ultimately, the Times won because it built a healthier advertising business.

Newspapers solidified their brands by building trust with readers and local power players such as business owners and government officials. From 1950 until 2000, newspapers operated with a level of financial security they’ll never have again. Even when newspapers struggled, they consolidated into conglomerates such as Gannett and Knight Ridder, both of which were publicly traded and operated with 20-40% margins for the majority of their existence.

The New York Times’ famous slogan — “All the News That’s Fit to Print” — flowed from the way news was shared and consumed. Newspapers were delivered by hand to a subscriber’s door every morning. Space was limited, so newspapers had a set number of story slots each day and editors-in-chief determined which stories made the cut. On some days, newspapers cut important news, and on other days, they filled the space by printing unimportant stories.

Each edition of the local paper packaged news, opinions, sports, and entertainment. The fun and widely read sections in the back half of the newspaper funded the important but less profitable ventures in the front half. Without the newspaper bundle, journalists wouldn’t have been able to conduct original investigative reporting. But backed by the security of its business model, journalists acted as the Fourth Estate, defined as the group with the explicit power to advocate for policies and the implicit ability to frame political issues.


How Newspapers Lost Their Geographic Monopolies

Since 1950, the news business consolidated into a series of chains. In addition to lowering market competition, consolidation helped newspapers save money on basic expenses, which raised profit margins. The average newspaper made roughly 80% of their revenue from display and classified ads and 20% from subscriptions.

Other papers skipped the subscription strategy altogether and made 100% of their profits from advertisements. By giving away their newspapers, they increased reach, which raised the value of each advertisement. One of my earliest childhood memories was watching newspaper distributors hand out the San Francisco Examiner for free. As an elementary school student, I couldn’t understand why a company would do this. One of my teachers told me that since the newspaper made money from advertising, they wanted to distribute the paper to as many people as possible even if it cost them cash upfront. As more people saw the newspaper, profitability increased so it was worth distributing for free.

Newspapers such as USA Today, the most popular newspaper in America, enhanced their words with images and mirrored the television aesthetic. The USA Today was founded in 1982, and grew into the third largest daily newspaper in the United States by 1984. Like television the stories are delivered in snippets and its colorful design is built upon pictures, charts, and other graphics.

 

 

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Source: The War Eagle Reader

Free or for-pay, communities need their local newspapers. Investigative reporting exposes corruption and kept politicians in check. But the eye on corruption disappears without a local newspaper. People can’t keep tabs on everybody in a big community. Gossip spreads too slowly, and misinformation is too hard to identify. Journalists have historically helped cities and countries solve the problem. When the system works optimally, bad actors are exposed strongly enough to incentivize people to cooperate.

Corruption tends to increase when a local newspaper goes out of business. Between 1996 and 2015, small cities who suffered the loss of a local newspaper suffered from increased long-term borrowing rates.

According to a 2018 CityLab article written by Kriston Capps:

“Without investigative daily reporters around to call bullshit on city hall, three years after a newspaper closes, that city or county’s municipal bond offering yields increased on average by 5.5 basis points, while bond yields in the secondary market increased by 6.4 basis points—statistically significant effects.”

Borrowing rates are influenced by the amount of trust in a society. When trust is high, the cost of money falls and vice versa. Thus, countries with relatively low levels of corruption and high levels of social trust tend to have low interest rates. And when borrowing is cheap, people are more likely to stimulate the economy by purchasing goods, building apartments, and investing in their community. When a local newspaper disappears, crooks and fraudsters win while everybody else suffers.

Local newspapers make most of their revenue from advertisements. Historically, local newspaper revenue has grown in lockstep with the American economy because total advertising spend only grows when the economy does. It hovered between 1-1.5 percent of American Gross Domestic Product (GDP) since World War II. In that time, total advertising units grew by a factor of 10 according to The Atlantic. In the 1970s, the average American saw roughly 500 ads per day. Today, that number has spiked to 5,000 advertisements per day — roughly one advertisement every 17 seconds for all of waking life. To be sure, this is a hard statistic to verify because it depends on the definition of “seen advertisement.” Nevertheless, the point still stands: Sometimes, it seems like we spend more time with advertisements than we do with our loved ones. As online advertising platform technology improved, businesses shifted their marketing spend away from local newspapers, leading to the death of hundreds of local newspapers.

 

 

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Source: L2

Facebook didn’t kill journalism. The Internet did.

Until the world was connected by underwater cables which transported information at the speed of light, newspapers had a local monopoly on the creation and distribution of news. More specifically, the death of newspapers was initiated by platforms like Craigslist. As its business grew, newspaper advertising revenues from classifieds shrank.

 

 

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Before the Internet, newspapers were a bundle of news, commentary, local advertising, personals, classifieds, and job postings. But the Internet offers a better place to perform all those tasks. There, the distribution of news is faster, the advertisements more targeted, and the commentary more personalized. Different publications have picked off a slice of the newspaper bundle. BuzzFeed unbundled the culture section, Politico unbundled the DC-focused politics section, and The Athletic unbundled the sports section. Newspapers benefited from global reach, which ended their informational monopoly over their home city.

When the Internet arrived, the balance of advertising spend shifted from brand to performance advertising. To define the terms, brand advertisements are geared towards people with no specific intent to purchase a product. They’re the billboards you see on highways and the glamorous model shots you see in Vogue. Historically, these brand advertisements have attracted the majority of dollars.

Now, that’s changing. Personalized advertising technologies, enhanced by large scale data-collection, have tilted the balance of advertising spend towards bottom-of-the-funnel performance ads like the ones you see on Google and Facebook.

For example, Google searchers know exactly what they’re looking for, and many people search with the explicit intent of making an immediate purchase. People who type “best bicycle shop” or “flight to San Diego” are much later in the purchasing process than a laid-back, latte-in-hand newspaper reader looking to kill some time. The lower an advertisement is in the marketing funnel, the bigger the internet’s advantage over traditional forms of media. Newspapers can’t deliver bottom-of-the-funnel marketing needs because nobody picks up a newspaper when they’re ready to buy a product.


Three Lessons from Newspapers

I. Business Models Matter

Spurred by the health of the newspaper business, journalists were historically free to focus on their craft. Subscription and advertising salesmen built the business on their behalf. Since journalists didn’t have to worry about financial constraints, many big-name publications like The New Yorker generally had the means to follow their core values, such as sticking to the facts, avoiding sensationalism, and assuming people were innocent until proven guilty.

In the second half of the 20th century, even though some journalists were much more popular than others, salaries for reporters were comparatively even. The narrow pay disparity didn’t reflect the wide popularity range. At some newspapers, top-tier journalists are at least five to 10 times more popular than average ones. But to maintain a full staff and stay profitable, salaries were effectively redistributed from popular journalists to unpopular ones.

Newspapers made the majority of their profits from the most popular writers but the best ones built their reputations by breaking news and investigating important, but unprofitable stories. Even if consensus was prioritized over truth and not every opinion could be heard, the system mostly worked for citizens, corporations, and the world-at large. Newspapers needed to fill their space, so they added filler stories alongside the sports and lifestyle sections.

Journalists who earn secure salaries don’t have to sacrifice quality journalism to pander to lowest common denominator readers. My college education centered around the art of reporting, not the business side of news. We were tested on morals, ethics, and the Associated Press style guide, but never the finances of a news organization or what it takes to build a loyal audience. Professors assumed we’d always have a job if we produced quality work. But in retrospect, they were blindsided by how fast the Internet would transform the news industry and invalidate the core assumptions of my university curriculum.

The way information was delivered influenced the relatively flat distribution of salaries. Fueled by a dependable business model, the newspaper business had quasi-socialist characteristics. Newspapers could directly track how many copies of each newspaper they sold but not how many people read each article in each edition. Without the tools to build direct relationships with their audiences, they lacked leverage in salary negotiations and couldn’t quantify their importance to the paper.

In contrast, today’s journalists can precisely measure their popularity. They do so by tracking page views and social media shares, and building one-on-one relationships with readers on platforms like Twitter and Substack. Some journalists like Taylor Lorenz, a New York Times employee who writes about memes, influencers, and digital culture, have been elevated above the publications they write for. She’s built a loyal audience because she shares unique perspectives on her beat not just in the pages of the newspaper, but on the feeds of social media.

II. Distribution Shapes Coverage

Sharing media is a form of communication, so it’s always been a social experience. When we send friends memes, videos, and articles, we’re often looking for ways to spark conversation and stay in touch with our loved ones.

In the last years of his life, before my grandfather passed away, he mailed entire sections of the newspaper to me, and circled his article recommendations. His system of sharing information was friction-filled. To share an article with me, he had to fold the newspaper, put it in an envelope, stick a stamp to it, drive to the post office, mail it, and wait a couple of days for it to arrive in my mailbox. Then, he’d call me to talk about it and ask how I was doing.

The modern Internet would have made things easier for my grandpa. Today, it takes three taps on an iPhone screen to share an article to any place with an Internet connection without bothering with the rest of the paper, making content a social experience. As a co-founder of The Huffington Post, BuzzFeed CEO Jonah Peretti was primed to make BuzzFeed the first big media company to capitalize on the ease of sharing. Peretti saw sharing as a proxy for how much media creates a social connection with people. Instead of reading the newspaper, readers went to BuzzFeed to find fun stories in easy-to-read and easy-to-share formats. Its readers didn’t have to subscribe to newspapers, and armed with the share button, average social media users replaced the paperboy on a bicycle and turned into information distributors.

By unbundling the newspaper, the Internet atomized news. The fundamental unit of news transitioned from an entire newspaper to a single article. The Internet allows articles to be shared individually because they don’t come packaged with the rest of the newspaper, Individual website links are passed around like notes in the back row of an elementary school classroom. With analytics platforms like Chartbeat, journalists turned their attention away from aggregate statistics like how many newspapers they sold and towards the real-time performance of each individual article.

As feedback improved, the business of news began to fall. As newspapers pursued popular, but superficial articles, the quality of news coverage decreased. As Jill Abramson, the former executive editor of The New York Times wrote: “As the newspapers tried to keep up with technology, executive editors were expected to be digital gurus and let business imperatives guide their editorial judgment.” Competition increased, so newspapers were forced to either maintain their quality standards and go out of business, or stay in business by attracting page views and imitating the people who threatened their business model.

Newspapers have folded under the weight of rising competition and falling advertising revenues. To save their businesses, they’ve pivoted from the expensive work of reporting and relied more on cheap tricks like turning tweets and press releases into articles. Desperate for clicks, all kinds of reporters have borrowed the tactics of bloggers and sensationalized their headlines.

To be sure, the news was never objective. But now, the top publications don’t even pretend to be and journalists have lost their position as sole arbiters of truth. Upton Sinclair once said: “A man cannot understand something if his salary depends on him not understanding it.” The modern equivalent for journalism is “never trust a journalist’s reporting on a company if that company threatens their job prospects.” People in power want to stay in power, so the economic anxiety of industry decline sometimes taints the objectivity of their reporting. The more people rely on the Internet for information, the more difficult the newspaper business will be, the more reporters will lose their jobs, and the more the median quality of journalism will fall.

 

 

Source:  Pew Research Center

In addition to creating perverse incentives for online reporters, the Internet has amplified competition for journalists. Even the best newspapers cannot compete with the scale of the Internet. Armies of ordinary underwear bloggers can out-compete multinational newspapers with offices in 26 cities in 15 countries, and thousands of people on staff. The rush to meet deadlines and run with the speed of an accelerating news cycle makes it difficult for journalists to research their stories in-depth. In contrast, experts spend years studying their craft before they ever write online. When the right story hits, they can share their experience with no constraints on the spread of their distribution. In the days after the second Boeing 737 Max crash, no-name pilots and independent writers with obscure blogs out-explained many of the world’s best newspapers. The variance in quality between journalists outside a field and experts within it is largest for technical or scientific fields.

Soon, a platform or publication will skip the process of hiring full-time journalists and incentivize specialists to inform the public about their areas of expertise instead. To date, platforms like Medium have tried but haven’t succeeded. Even though specialists feel a duty to inform the public, they don’t want the hassle of setting up a website to distribute their work. Guided by a respect for their field of study, those experts will cover their beats with textured nuance instead of sensationalizing their stories to please the algorithmic lords.

In the words of one anonymous writer:

“[Professionals] are outfoxed at every turn by citizen journalists on Youtube, Periscope, and Twitter who are simply savvier, less constrained, more authentic, and less wooden. Corporate content is grim almost by definition. The unvarnished thing is far more genuine, and it shows.”

In an age where ordinary people have the power to publish their ideas online, independent writers who write in their spare time on weekends can out-shine multinational newspapers with offices scattered around the globe. If these international outlets have an advantage, it comes from large armies of fact-checkers, which even small-town newspapers can’t pay for. But for subjects that require local knowledge, independent writers will increasingly outcompete the biggest newspapers.

III. Fact-Checking and Russell Conjugations

The problems of misinformation aren’t as new as they seem. The practice of yellow journalism, defined by sensationalism and crude exaggeration, began long before the Internet when journalists didn’t let facts spoil a spicy story. Writing about newspapers in 1914, Max Sherover, the author of Fakes in American Journalism said:

“The stories they have forwarded are obviously composed in large part of wild romancing. They snap up the most improbable reports and enlarge upon them with every detail that their fancy can suggest.”

Long before mass media, inaccurate information published by newspapers was often spread by telegrams, which were republished by newspapers in other parts of the world before the end of the week. More recently, in the mid-20th century, fake news stretched from falsely positive stories of the Vietnam War to the cover-up of Lyndon B. Johnson’s corruption. On the Internet, Gawker was early to borrow the salacious tactics of yellow journalism.

Today, we ask readers to point out flaws by responding on social media or publishing their own blog posts. For example, Frederick Smith, the CEO of FedEx responded to a New York Times article about federal income taxes, and challenged A.G. Sulzberger, the head of the New York Times and the business section editor to a public debate. Likewise, Alexey Guzey, an independent researcher, used his blog to invalidate claims made in Why We Sleep, and the article spread so far that he was interviewed by the BBC alongside the author of the book

Automated fact-checking systems are still limited, but false statistics are usually corrected quickly. But after false stories are corrected, narratives take years to correct themselves. And even when statistics can be verified, their meaning and relevance can be debated without conclusion. According to the Poynter Institute, an American-based journalism school, automated fact-checking systems “can only identify simple declarative statements, missing implied claims, or claims embedded in complex sentences which humans recognize easily. This is a particular challenge with conversational sources, like discussion programs, in which people often use pronouns and refer back to earlier points.”

In the coming decade, fact-checking algorithms will find scalable ways to verify explicit facts and statistics. Where the software solutions fail, I’m optimistic about armies of fact-checkers who can validate black-and-white facts. Meanwhile, I’m less optimistic about the subtler sides of false information. News can be misleading even if all the facts are true. Writers who want to attract an audience for their ideas have an incentive to stretch or distort facts to give them a compelling narrative arc. In doing so, some journalists omit important details, conflate fact with opinion, and change the meaning of the story.

The founding fathers who penned America’s laws knew the importance of sharing the whole story. Thus, everybody who testifies in an American court puts their hand on the Bible and says: “I swear to tell the whole truth and nothing but the truth.” Fact-checkers will struggle to identify lies of omission for the foreseeable future. To be fair, omissions in news stories are often accidental. But that doesn’t make them any less damaging.

More scary, consumer computer-generated imagery (CGI, as used for special effects in movies) has improved tremendously. As the tools to create it are distributed, expect an increasing amount of fake viral content. Our brains are wired to believe what we see. For example, a deep fake recently went viral when somebody doctored a video of Tiger Woods draining a putt to win the match at the President’s Cup.

Once a juicy piece of news is published, it’s hard to stop the spread of it. One study in Nature found: “Falsehood diffused significantly farther, faster, deeper, and more broadly than the truth in all categories of information.” The negative effects of misinformation were worst for stories about terrorism, science, natural disasters, urban legends, and financial information. All of them are prone to propaganda because they’re hard for casual readers to evaluate and ignite fear in the minds of their audiences.

So how will we solve the problem of fake news? 

A prominent Silicon Valley entrepreneur and investor named Balaji Srinivasan believes the future of fact-checking will depend on a combination of bounties: reputation scores, verified sourcing, and decentralized reporting (which is already here). Newspapers have always encouraged readers to contact them with more information, but the requests for information are increasingly explicit and visible.

In a recent article about how the California Department of Motor Vehicles was selling citizens’ data, Vice added a request for information at the bottom of the article with contact information and a clear call-to-action. I don’t know how well the strategy worked, but I’d wager that crowdsourcing techniques will gain popularity among publications with large readerships.

In theory, crowdsourcing has always been possible. But the two-way, call-and-response nature of the Internet will turn aspects of fact-checking into a collaborative and interactive endeavor. People will seek truth by pooling their attention, interests, and local knowledge.

 

 

Vice.png

Source: Vice

In addition to watching what writers say, we should study what readers hear. Looking at facts while the battle is waged over emotion is like looking to the West while you’re enemy attacks from the East. Words don’t just explain the world. They change how we feel about it.

Good writers know how word choice can sway the emotions of their readers and the meaning of their sentences, so the slings and arrows of cunning narratives usually come in the form of subtle changes in the emotional texture of a story.

Bertrand Russell defined a Russell Conjugation in a 1948 interview on BBC. In it, he shared three examples of sentences with similar definitions, but different connotations:

Sentence 1: I am firm.

Sentence 2: You are obstinate.

Sentence 3: He/She/It is pigheaded.

Most people will have a positive emotion to the first sentence, a mild reaction to the second, and a negative reaction to the third. Likewise, writers can vary the meaning of their words by changing the length or structure of their sentences. Once their words are set in print, they can enhance their messaging with images that manipulate the reader’s emotions.

Other examples of a Russell Conjugation include:

Sentence 1: I have reconsidered the matter.

Sentence 2: You have changed your mind.

Sentence 3: He has gone back on his word.

Sentence 1: I know what I want.

Sentence 2: You like things to be a certain way.

Sentence 3: He needs everything to go his way.

Sentence 1: I am righteously indignant

Sentence 2: You are annoyed.

Sentence 3: He is making a fuss over nothing.

As Eric Weinstein wrote in an article for Edge

“Many if not most people form their opinions based solely on whatever [Emotive] Conjugation is presented to them and not on the underlying facts.

 Most words and phrases are actually defined not by a single dictionary description, but rather two distinct attributes:

 1. The factual content of the word or phrase.

2. The emotional content of the construction.”

Political pollster Frank Luntz re-discovered the Russell Conjugation in the early 1990s. To his surprise, the emotional hue of a word can invert the meaning of a sentence. People often care less about the truth of their beliefs than the consequences of believing something for fear of being ostracized from their social group.

Shoddy journalists can change the meaning of a sentence by replacing a single word with a synonym that implies a different meaning. For example, the same person can support an estate tax but oppose a death tax — even though they are the same thing. Likewise, many voters are against illegal aliens, but support undocumented workers. Like hypnosis, Russell Conjugations are deceptive because they are subtle and implicit.


Pillar #2: A History of Television

The Rise of Cable Television

People tend to focus on content, but the architecture of our media environment matters much more. Our image-based political environment began with broadcast television but didn’t take over America until cable television.

I felt the flip from broadcast to cable first-hand. For the first 15 years of my life, my family lived in a cable-free home. We had access to only six channels: FOX, KRON, CBS, ABC, PBS, and NBC. But right before I entered high school, we moved to a home with cable access and more than 1,000 channels. For the next few years, my television consumption exploded. In the click of a button, I could hop between ready-made shows from every corner of society from live sports, to stand-up comedy, to political analysis. Instead of going out into the world, the world came to me.

How did cable television become so vast?

Immediately after World War II, the core American narrative was driven by only a small number of broadcast television channels. But cable television changed that. And with it, Americans had access to so many channels that they couldn’t keep track of them all.

Unlike broadcast television, cable technology wasn’t limited by bandwidth constraints. Cable stations didn’t need to secure spectrum licenses (permission to use radio waves), so compared with broadcast television, new entrepreneurial ventures weren’t as limited. Once satellite television arrived, rural homes could communicate with signals in space, no matter where they were.

Free from legal roadblocks and pulled by both increased bandwidth and a growing market of television viewers, the number of television channels exploded. Spurred by the promise of economic opportunity, networks created new kinds of content because television producers no longer had to appeal to the widest possible audiences. Targeting small, high-intensity audiences became a better business model than trying to reach everybody. With the rise of cable television, the three-letter media companies lost their iron grip over narrative control to their friends down the street.

In 1980, there were 28 cable networks, and by 1990, there were 79. Sensing an opportunity to serve news junkies, Ted Turner founded CNN (Cable News Network) and launched the first 24/7 news channel in 1980. Fox News and MSNBC followed suit in 1996, each with their own perspective on the world.


Television’s Grip on Opinion and Advertising

Even in the era of the Internet, television networks have maintained a firm grip on all aspects of Western culture and its information environment. And yet, we’re blind to its all-encompassing effects. As media theorist Neil Postman wrote in 1984:

“There is no subject of public interest — politics, news, education, religion, science, sports — that does not find its way to television. Which means that all public understanding of these subjects is shaped by the biases of television.

 Television has become… the background radiation of the social and intellectual universe, the all-but-imperceptible residue of the electronic big bang of a century past, so familiar and so thoroughly integrated with American culture that we no longer hear its faint hissing in the background or see the flickering gray light.”

Television sets the tone for American intellectual life. It’s the conductor from which everything else follows. Our culture of emotional politics and superficial debates result from the influence of television. MSNBC and Fox News are much more polarizing than a 1960s broadcast ever was. Thus, the majority of news coverage feels frantic and schizophrenic. Since the invention of cable television, American politics has polarized.

 

 

Source:  Gallup

Source: Gallup

To understand modern discourse, you have to look beyond its content and study the incentives of our communications technologies and how they shape human consciousness.

Out of all the money spent on advertising in America, roughly 40% of it goes to television. Even in the age of the Internet, television has kept its grip over American life by changing its product in response to the explosion of the image. In addition to promiscuous use of the “Breaking News” button, CNN has adopted the tactics of hard-hitting, conflict-heavy ESPN talk shows like First Take and Pardon the Interruption. Meanwhile, the presidential debates — where contestants fight for the most powerful job in the world — feel like a circus and lack the rigor of a middle school debate club.

Television has maintained its stranglehold over American life by changing its product in response to the explosion of online content, produced by amateurs and published on platforms like Twitter, Instagram, and YouTube. Its resilience comes from older audiences, who feel the product is good enough and don’t feel compelled to receive their news from online blogs and social media.

 

 

US Advertising Spend.jpg

But recently, since the mid 2000s, in the face of stagnating ad revenues, TV news has transitioned from reporting to entertainment³. Television reporters know regular people on Twitter have a better pulse on breaking news, so they’ve responded by trying to entertain their audiences instead becoming the most entertaining way to consume developing stories.

Television cannot be too serious for too long. Thus, even when the news talks about crime and terror, morning talk shows still open and close with the same cheery reporters and up-beat music.

Their desperation worsened as watch time and pay TV subscribers fell in the past decade. In the face of falling advertising revenue, television networks turned up the dial on advertising loads. Some sped up content to create extra ad time. The traditional 32 minutes of content and eight minutes of advertising became 20 minutes of content and 10 minutes of advertising. Today, cable news is louder than a pack of Rottweilers protecting their home during a four-alarm fire.

 

 

US TV Time.jpg


Three Lessons from Television

I. The Overton Window

In media theory, the “Overton Window” is defined as the range of acceptable opinions in a society. It’s an invisible cognitive prison. Anything inside the window is fair game, but stretch beyond its borders in polite company and you’ll turn heads or be ostracized from conventional social groups. Even if the number of channels increased after cable television, the networks still submitted to the Overton Window, which made them more similar than they seemed. A quote attributed to G.K Chesterton, a well-renowned writer and theologian, best describes the phenomenon:

“A horrible suspicion that has sometimes haunted me is that the Conservative and the Progressive are secretly in partnership. That the quarrel they keep up in public is a put-up job, and that the way they perpetually play into each other’s hands is not an everlasting coincidence.”

Even if cable television fragmented the number of channels available on TV, the vast majority of those channels were owned by just a few networks, such as NBC, CBS, and Disney. Back in college, I remember seeing a list of how few companies were behind the galaxy of television channels. I felt betrayed by the unexpected “red pill moment” and struck by the monoculture behind a facade of intellectual diversity. The channels were all centrist, pro-business, and respectful of authority. Based on conversations I’ve had with New York journalists, it seems that even if the executives of major Manhattan media outlets no longer worked for the same networks, they still attended the same parties and sent their kids to the same Upper East Side private schools, which enhanced intellectual conformity among media moguls.

 

 

Big TV.jpg

Source: Connor

Centralization in the media industry resembles the centralization in the food industry.

The added efficiencies of market concentration in the food industry has made food abundant for the first time in human history while also contributing to unprecedented levels of obesity and diabetes.

 

 

Big Food.png

Source: Business Insider

Big food and media companies have created an illusion of diversity. When we focus on the differences between brands, we lose sight of their shared characteristics.

News consumers who hold a microscope to the differences between Fox News and MSNBC couldn’t see that the entire media narrative was controlled by a small handful of media companies who disguised their similarities by creating a culture of vicious debate within the range of their artificially narrow window of disagreement. As MIT professor Noam Chomsky once said, “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion but allow very lively debate within that spectrum….” By focusing on the differences between Fox News and MSNBC, casual news consumers passively accepted and ignored all the things they agreed upon such as continuing military involvement in the Middle East, upholding the prestige of Ivy League universities, and until recently, the benefits of free trade agreements with China. The narratives they pushed were more alike than different, even if no single individual controlled it.

Consumers who were blinded by an illusion of diversity fell into the trap of the “narcissism of small differences,” Sigmund’s Freud’s idea that the small differences between people are exaggerated in our minds. People tend to fight over trivial differences that are easy to understand instead of complicated things that demand high-level thinking. In social science, this is known as the Bike Shed Effect. To prevent again the narcissism of small differences, ancient Jewish law strictly prohibited Jewish men from marrying two sisters. The smaller the differences between the two groups, the greater the intensity and frequency of the conflict, which is why family feuds and civil wars can be so bitter.

Sometimes, trivial arguments between pundits keep our eyes away from important stories that deserve debate. Often, the bloodiest online battles are waged over the pettiest conflicts, such as the bitter controversy over the sexist and dystopian politics of a recent Peloton commercial which caused the stock to fall by 10 percent. Ferocious debates over the politics of the television commercial pulled attention away from a more important story about the leaked Afghanistan war documents, which showed that the U.S. government deliberately misled the American public about its 18-year involvement in Afghanistan — the longest armed conflict in U.S. history.

II. The Explosion of the Soundbite

Compared to newspapers, television is less about ideas and more about images and sound. Whenever a new technology is invented, society adopts a new way of thinking and feeling. The scale, pace, and patterns of human activities move in response. Marshall McLuhan, known as the father of media theory, argued that book-oriented cultures tend to have a uniformity of thought. When media moves from text to images, societies start to worship glamour over truth, emotion over rationality, and youth over wisdom.

Content follows form. True to McLuhan’s prediction, television medium makes us focus on style over substance and prioritizes the trivial over the profound. The written word shines its spotlight on the content of a message. People who read the Gettysburg Address when it was written focused on the texture of Lincoln’s prose, not the fashion of his top-hat. In contrast, televised media highlights the messenger instead of the message.

The history of television news is defined by two distinct epochs: before and after cable television. By encouraging image-based communication, television changed how we think. It paved the way for a dictatorship of the eye over the mind, which creates an emotionally turbulent world which prized looks over logic and passion over reason. It deluded people into thinking the world could be summarized in small nuggets of pre-packaged information. In response, people outsourced their thinking to multinational media companies who “keep them informed.”

Since this media is easier for children to absorb than text, children can sneak into the adult world earlier in life. The average American adult watches more than four hours of television per day. Today’s children are intoxicated with adult images like war, riots, crime, and Miley Cyrus butt-twerking videos. Thus, television makes children act more like adults, and adults act more like children — which infantilizes adults.

Just as USA Today turned news into entertainment, cable television turned entertainment into news. Stations like Entertainment Tonight borrowed the traditional news style and created daily programs for celebrity news and gossip that aired at the same time as the CBS Evening News and ABC World News Tonight. Americans now expect news to come to them in small and easy-to-consume packaging — just like a bowl of sugar-filled cereal.

Once upon a time, Americans were more or less united by the same noble vision of the American Dream. Today, an increasing number of Americans live for the trivial pursuit of keeping up with the Kardashians. Here’s Neil Postman, the author of Amusing Ourselves to Death:

“Although the Constitution makes no mention of it, it would appear that fat people are now effectively excluded from running for high political office… it is implausible to imagine that anyone like our twenty-seventh President, the multi-chinned, three-hundred-pound William Howard Taft, could be put forward as a presidential candidate in today’s world… For on television, discourse is conducted largely through visual imagery, which is to say that television gives us a conversation in images, not words… You cannot do political philosophy on television. Its form works against the content.”

Since the invention of television, politics has transformed into show business. On television, charisma and matters more than ideas. Looks have trumped intellectual substance for decades. Instead of reading the issues and voting for the best policies, television-voters decide between “the grandma in the suit” and the “tycoon with suave blonde hair.” Former President Richard Nixon once gave Senator Edward Kennedy advice on how to make a run for the presidency: Lose 20 pounds. A speaker succeeds as long as they keep the audience’s attention and pull on their heartstrings. Television-watching voters are moved not by nuanced arguments but by jokes and loud applause. Emotional reactions are loudest for divisive phrases like “we’re going to take down the enemy” and “we’re going to crush the other side,” which increased as public discourse moved away from the written word.

As Paul Graham, the founder of Y-Combinator observed, since television gained popularity, the most charismatic candidate has won the presidential election. (To be clear, Graham doesn’t say charisma is the only factor in a presidential election. Rather, he argues it’s the most significant factor remaining after the tactics of both parties cancel each other out.) The 1968 election between Richard Nixon and Hubert Humphrey is the single exception to the charisma rule. Nixon knew he didn’t captivate voters on television, so he refused to debate Humphrey there. Instead, he used scripted advertising campaigns to reach voters through television.

Naturally, the presidents who best game our image-based media environment get elected. Marshall McLuhan once observed that “policies and issues are useless for election purposes, since they are too sophisticated.” Knowing this, our national leaders have become tribal overlords who rally their audiences with snappy slogans and emotion-filled speeches. In text, an argument needs to follow from one sentence to the next. But a speech demands no such rigor, so politicians win with short, catchy soundbites.

Between 1968 and 2000, the average soundbite of a presidential candidate was 43 seconds. By the end of the 80s, the figure dropped to nine seconds, and by 2000, it was 7.8 seconds.

The competition for the ultimate prize — presidential control over the nuclear football and weapons so powerful they could wipe out humanity — is won not by making well-supported arguments but by trolling opponents and crafting viral memes.

When we watch television, we focus less on what is said and more on what we see. By showering us with trivial facts that are easy to talk about but impossible to act on, television creates a society where people talk about political drama instead of by taking action directly or studying the specifics of public policy. For example, how many Americans scream and shout about the healthcare system without studying the influence of Purdue Pharma on the opioid crisis?

In addition to highlighting the trivial, television makes everything about the present, which prevents any discussion about the logic behind why things are the way they are. As Bill Moyers once said: “We Americans seem to know everything about the last twenty-four hours but very little of the last sixty centuries or the last sixty years.” On television, people can change the channel with the click of a button, so television programs do not want to bore people. News directors design their programs so viewers can tune in at any moment without context, and be immediately entertained. They dumb things down so people can catch up. Thus, television programs touch only the froth of an argument and stay away from nuance underneath the surface. In the trade-off between entertainment and education, entertainment will always have the final word.

While books focus on the past, television directs its gaze towards a tiny fraction of the present. Only a narrow percentage of books focus on the present. Comparatively, the vast majority of newspapers and television focus on the here and now. By doing so, they pull us into a turbulent, never-ending present., filled with rage and fury. We drink cocktails of exaggerated headlines and shots of breaking news until we’re drunk on what’s trending.

The television world asks people to return to the news every day in order to keep up with the endless churn of information as if it’s the key to a noble and virtuous life. In reality, following the news is like running on a treadmill that spins faster and faster but doesn’t go anywhere.

III. Common Knowledge and the Benefits of Advertising

Too many people blame advertising for the problems of the media. Critics such as Walter Lippmann argued that mass media turned normal citizens into obsessive consumers when he said, “While television is supposed to be free, it has in fact become the creature, the servant, and indeed the prostitute, of merchandising.” Mindless media consumers become slaves to consumerism, paralyzed by fabricated anxieties that only purchases can suppress.

Through billboards and banner ads, companies engineer problems so their products can solve them. For example, bad breath wasn’t a problem people discussed until advertising campaigns in the early 20th century invented the problem and swooped in to solve it with products such as toothpaste and mouthwash.

Advertisers are applied psychologists. Instead of selling products, they tell people that by buying their products, they will become better versions of themselves. Advertisers know it’s better for their products to be misunderstood than ignored, so they capture consumer attention by focusing on the emotional benefits of purchasing a product instead of using facts, figures, and statistics that most people will ignore.

As any advertising executive will tell you, people overestimate their capacity for independent thought. The more a message is repeated, the more inclined people are to believe it. By creating the space for mass advertising, the mass market fragmented identity. People didn’t travel much before the invention of modern transportation. Most people lived their entire life in the same town and worked the same jobs as their parents. By unleashing individual desires, the mass market gave people the tools to express themselves. The most valuable brands seek to amplify our self-image. Apple represents creativity, Nike represents performance, and Harley-Davidson represents freedom. And by supporting these brands, we can speak to the world without saying anything at all.

Here, I’d like to defend advertising.

By subsidizing news and entertainment, advertising brought information to the masses. It made information free, which made the world accessible. In a span of decades, people who never had access to the broader world had near-unlimited advertising-supported information at their fingertips. And as access to newspapers, television, and magazines expanded opportunities for lifelong education, curious people gained a capacity for self-directed learning. Historically, advertising-based business models have been the most scalable way to finance free journalism.

By supporting the free (to consumers) or inexpensive distribution of information, advertising makes common knowledge possible. Micahel Chwe outlined the idea in a criminally under-rated book called Rational Ritual. Here’s how he describes the phenomenon of common knowledge:

“Knowledge of the message is not enough… for the message to be successful, each person must not only know about it, each person must know that each other person knows about it. In fact, each person must know that each other person knows that each other person knows about it, and so on; that is, the message must be ‘common knowledge.’”

It’s not enough for everybody to know a fact. Rather, everybody must know that everybody else knows that fact. Certain beliefs are only helpful if everybody in a community commits to them. The need to not only transmit information but create common knowledge explains why public rituals, rallies, and ceremonies are consistent across cultures. They don’t just transmit information. Rather, by making a shared set of beliefs explicit, they serve as an ethical blueprint for the community. Efficiency increases once common knowledge has been established because everybody levels up to a shared baseline of intent and understanding.

I underestimated the importance of widespread access to information until I studied the history of totalitarian regimes. Time and again, demagogues crackdown on public communications to prevent the spread of common knowledge. In a matter of months, an obvious truth can be downgraded from common knowledge to rude, to unspeakable, to unthinkable. And soon, citizens begin to censor themselves and disable their capacity for free thought.

Advertising-supported mass media enables people to unite in support of a common cause and rebel against tyranny. Rebellion is a coordination problem. Even if all the citizens despise their leadership, they cannot coordinate without common knowledge. But in the case of a rally, once some people start protesting, bystanders will follow because common knowledge has been created. Sometimes, the courage of one person can change the spoken preferences of an entire civilization.

Advertisers are happy to pay a common knowledge premium. Super Bowl advertisements are expensive because it’s the biggest event of the year. Each additional eyeball raises the cost of advertising because when a viewer sees an advertisement during a popular show, they know thousands of other people are seeing it too.

 

 

Source:  Rational Ritual    Caption: This study was completed before the rise of the Internet. On television, everybody tends to receive the same advertisement. Today, social media exhibits similar cost increases, but for a different reason. On television, the increase in cost accounts for the “ common knowledge premium.” But on platforms such as Google and Facebook, where advertisers auction for attention, the cost increase comes from low relevance scores and saturated audience targeting.

Source: Rational Ritual

Caption: This study was completed before the rise of the Internet. On television, everybody tends to receive the same advertisement. Today, social media exhibits similar cost increases, but for a different reason. On television, the increase in cost accounts for the “ common knowledge premium.” But on platforms such as Google and Facebook, where advertisers auction for attention, the cost increase comes from low relevance scores and saturated audience targeting.

Advertisements on Google and Facebook also become more expensive as you try to reach more people, but not because of common knowledge. Both companies have an auction for scarce advertising space, so advertisements become more expensive due to market saturation and falling relevance scores. But on television, market saturation and relevance scores don’t matter because networks usually show the same advertisement to everybody watching.

To summarize the parallels between newspapers and television: In their early days, creators on both mediums monopolized distribution and served a lowest common denominator audience. With newspapers, the Internet cable and increased competition. And with television, competition increased with cable news and later, the Internet too. With newspapers, truth was gamed with Russell Conjugations, while audience perspectives on television were swayed with images that prioritized the trivial over the profound. Newspaper editors responded to shifts in media by adapting their newspapers to America’s obsession with the image. Likewise, after the invention of social media, television directors adopted the loud reporting techniques and turned up the entertainment dial.

Both mediums display the Paradox of Abundance: the average newspaper article and television show is getting worse and worse, while the best gets better and better.

 

Pillar 3: News on the Internet

The Triangle of Information Flow

“The media, like any group of animals, gallops in a herd. It takes just one steer to start a stampede.” — Ryan Holiday

Today, bloggers seed most of the narratives. Then journalists amplify them.

Bloggers find new ideas by crawling through the backchannels of the Internet. They’re swift and nimble, so they act as idea scouts who validate stories before more credible journalists report on them. One study from George Mason University shows 89 percent of journalists report using blogs to research their stories, and the faster the news cycle moves, the more journalists borrow information from bloggers.

According to a 1995 document from the Clinton archive called The Communication Stream of Conspiracy Commerce, political manipulators plant salacious stories by targeting the lower rungs of online media. The stories begin in obscure nooks of the Internet, such as forums and email newsletters. Tabloids and bloggers who pick up these stories expand their reach. A handful of those stories are then picked up by big-name media reporters, at which point the story gains national recognition. Once legislators in Washington D.C look at the story, it gains enough legitimacy to be covered by major media outlets, such as The Washington Post and The New York Times.

I call this the Triangle of Information Flow. Ryan Holiday, the author of Trust Me: I’m Lying, summarized it as such:

“Online publications compete to get stories first, newspapers compete to ‘confirm’ it, and then pundits compete for airtime to opine on it. The smaller sites legitimize the newsworthiness of the story for the sites with bigger audiences. Consecutively and concurrently, this pattern inherently distorts and exaggerates whatever they cover.”

 

 

Triangle of Information.jpg

The media isn’t a set of individual people. It’s a networked ecosystem of people in the top one percent of information consumers. Like a family of ants, they can exhibit tremendous collective intelligence by moving in unison. But sometimes, the system goes mad. In Wisdom of Crowds, James Surowiecki tells the story of an army of ants who moved in a giant circle 1,200 feet in circumference. The circle was so big that ants needed two and a half hours to walk around it. The ants had been separated from their colony, and as usual, they followed one rule: Follow the ant in front of you. When the system works, ants exhibit collective intelligence. But when the system goes haywire, no single ant is independent enough to redirect the flow of the tribe, so the wisdom of crowds turns into the madness of crowds.

Just like a family of ants, the media sphere is hyper-connected. Journalists rely on other journalists who operate on blogs because they work under tight deadlines and don’t have the time to independently verify every piece of information. Thus, misinformation is everywhere, not because journalists have bad intentions, but because humans are hyper-imitative creatures and honest people make honest mistakes.


Friends and Enemies 

Rivalry breeds convergence. At once, it draws people together and pulls them apart. When two people become rivals, they begin to resemble each other more than they care to admit. The two rivals subconsciously mirror each other and forget about the ultimate goal they aim to achieve. Thus, two people who want the same thing will initially be united by their shared desires, but eventually torn apart by bitter competition. The more two people resemble each other, the fiercer the competition will become.

In the race to be unique, people often become the same. My favorite examples include wedding parties, halloween costumes, Burning Man outfits, people visiting the same Instagram tourist destinations, and college applicants who spice up their resumes with the same extra-curricular activities. In every example, people try to stand out so much that they end up looking similar.

Likewise, the more journalists and bloggers compete, the more they exhibit similar behavioral patterns. The crush of declining revenues and industry-wide layoffs is forcing many big-name media outlets to borrow the tactics they once condemned. Casual bloggers and professional journalists have both resorted to the same attention-grabbing tactics such as sensational stories and clickbait headlines. And increasingly, the reality we see on screens is more vivid, more colorful, and more entertaining than the one before our eyes. The ideas are spicier, the images are crisper, and the headlines stir our emotions in ways reality will never be able to match.

In the desperate quest for eyeballs, bloggers and journalists are simultaneously the best of friends and the worst of enemies. Both of them are bound by tight deadlines and page view quotas, so they depend on each other for narratives, distribution, and legitimacy. Since they compete for space on the same algorithmic feeds, they also compete for attention. Bloggers increasingly write with the authority of a news publication but envy the credibility of journalists. Meanwhile, journalists increasingly write with the speed of the blogosphere but envy the independence of bloggers.

Most people see love and hatred as polar opposites. But in the human mind, the line between the two isn’t that clean. Dependence breeds both love and resentment, so hatred is often a byproduct of love. Everybody suppresses a hidden box of resentment for the people they love most. A relationship, for example, is a covenant between two people to let the other person annoy and upset you more than anybody else.

Or, as Elie Wiesel once wrote: “The opposite of love is not hate, it’s indifference. The opposite of art is not ugliness, it’s indifference. The opposite of faith is not heresy, it’s indifference. The opposite of life is not death, it’s indifference.”

News publications have razor-thin margins, so the threat of layoffs looms large. According to a Pew Research study, employees of more than 36 percent of newspapers experienced layoffs between January 2017 and April 2018. Plagued by the fear of job insecurity, newsrooms have become battlefields of gossip and speculation. By amplifying the extreme at the expense of the mundane, social media algorithms fuel outrage and controversy. Stirring up emotions may be good for business, but it pollutes our information environment and lowers the quality of the average article. As the president of CBS once said: “[The election of Donald Trump] may not be good for America, but it’s damn good for CBS.”


Problems with Subscription Media

Returning to the central issue of news, common knowledge explains why mass-market subscription media is a pipe dream. In my experience, people who say everybody should pay for news spend most of their time with people who also pay for news, so they overestimate people’s appetite for paywalled information. Additionally, advertising and subscription-based media are governed by different incentive structures. Advertising-supported publications need to reach a large number of people, so they have to cater to a wide diversity of viewpoints, which is why the market for non-partisan, mass market subscription media is limited. Subscription publications will reinforce their readers’ perspectives because most people only pay for information they agree with. Thus, an increase in subscription-supported media won’t just fragment information sources. It will fragment society.

To quantify the shift in rhetoric caused by the transition to subscription media and the second-order effects of information abundance, look at the rise in social justice related word use at The New York Times with an inflection point between 2010 and 2014.

 

 

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Reflecting on his time at This Magazine and the problems caused by subscription journalism, Andrew Potter wrote:

“When a news organization relies almost entirely on its readership for its revenue, it will inevitably start to cater to what the owners perceive to be the political centre of gravity of that readership. And the readership will in turn make demands on the editors to shape the coverage in certain ways, which will tend to gradually shift that centre of gravity away from the middle, and towards the political extremes. The organization will end up in a content box the readership won’t let them out of.”

The press can’t keep a check on power unless people have common knowledge about the same important stories. Before we rage against the house of advertising, we should pause to consider its benefits. Just because advertising and technological shifts have contributed to the structural failures of our media environment, we shouldn’t outright condemn them. Subscription media comes with its own challenge of catering to its typical readership rather than delivering balanced coverage.


Pillar #4: Problems of Constant Consumption Across Mediums

I. Pseudo News Fills the Cycle

By nature, images tend to appeal not to argument or evidence but to prejudice and instinct. They bypass our rational senses and tug at the elephant inside our brains, thereby strengthening the pull of emotional narratives.

The first widely-seen wire-photo was sent in 1924 when American Telephone and Telegraph Company sent a photo of Calvin Coolidge from the Republican Convention in Cleveland to the New York Times. But the first popular weekly picture magazine did not appear until Life Magazine in 1936. It was an instant hit, and the magazine had a circulation of 1 million people within the first year.

The ease of sharing images by wire led to an explosion in the demand for news, which incentivized media outlets to invent pseudo-events to inflate the supply of news. In a famous study of media theory called The Image, Daniel Boorstin pointed to a shift in news production after World War II. Journalists expanded their job titles. Instead of merely reporting on the news, they began to create it. News organizations became production plants for events created only to be reported on, which fed the unquenchable thirst of journalists looking for attention, executives looking for cash, and advertisers looking for eyeballs.

Ordinary reality ceased to capture readers’ attention. Reporters were responsible for making reality seem more interesting than it really was. If a journalist couldn’t find an interesting story, they had to add color to an existing one, and those who couldn’t, analyzed the world or speculated about the future. Or, as Nassim Taleb, one of the world’s leading writers on risk and and investing, once said: “This business of journalism is about pure entertainment, not the search for the truth.”

Desperate for stories, reporters turned to pseudo-events defined as an event designed to attract media publicity. They include interviews, press releases, and annual celebrations like anniversaries and award shows. They’re manufactured but made to be newsworthy. At once they’re clear enough to be discussed but ambiguous to be written about from a variety of perspectives, often with the explicit goal of creating conflict to stir up the media buzz.

Pseudo-events aren’t propaganda because they simplify reality instead of exaggerating it. By saturating the world and making it seem more grand than it really is, pseudo-events make a fantasy out of the mundane. As Boorstin explains:

“Pseudo-events make simple facts seem more subtle, more ambiguous, and more speculative than they really are. Propaganda oversimplifies experience, pseudo-events overcomplicate it.

 The American citizen thus lives in a world where fantasy is more real than reality, where the image has more dignity than its original.”

Since the arrival of mass media, politicians have been masters of pseudo-events. Washington political correspondents are so desperate for news that they swarm presidents like teenagers waiting in line at In-N-Out Burger. President Franklin Delano Roosevelt planted the seeds for so many headlines that he was once called “the best newspaperman who has ever been president of the United States.” He also turned boring presidential press conferences into lively Fireside Chats and shaped the narrative in his favor.

By publishing daily distractions under the glitzy guise of informing the public, journalists create pseudo-events that contribute to systematic distraction.

Here’s Boorstin:

“We need not be theologians to see that we have shifted responsibility for making the world interesting from God to the newspaperman.

 We used to believe there were only so many ‘events’ in the world. If there were not many intriguing or startling occurrences, it was no fault of the reporter. He could not be expected to report what did not exist. Within the last hundred years, however, and especially in the twentieth century, all this has changed. We expect the papers to be full of news.

 The successful reporter is one who can find a story, even if there is no earthquake or assassination or civil war. If he cannot find a story, then he must make one—by the questions he asks of public figures, by the surprising human interest he unfolds from some commonplace event, or by ‘the news behind the news.’“

Instead of covering events directly, news anchors focused on how important people perceived those events. And instead of covering events objectively, journalists pivoted towards subjective interpretations of other subjective interpretations.

The small number of networks who controlled the means of distribution had all-access White House press badges. In exchange for coveted, up-close access to the president, journalists protected presidents and reported on a steady stream of pseudo-events. Presidents were always in the public eye, which made the office of the president more important.

Sometimes, in exchange for this access journalists hid some truths about presidents. For example, journalists didn’t cover John F. Kennedy’s affairs or Lyndon B. Johnson’s corruption. This system of cooperation between the journalists and the politicians they covered changed with the explosion of online news outlets and the subsequent rise of the 24/7 news cycle.


The Negativity Bias

Obsessive news consumption leads to a negativity bias that distorts our worldviews because creation happens slowly, but destruction happens fast and seizes our attention. Therefore, the kind of rare events that jump to the front pages of the newspaper tend to be negative, while stories about steadily declining poverty rates or improvements in global health rarely make national headlines.

In the words of Hans Rosling, the author of Factfulness and a professor of international health at Karolinska Institute

“It’s not the media’s role to present the world as it really is. They (media) will always have to compete to engage our attention with exciting stories and dramatic narratives. It is upon us consumers to realize that news is not very useful for understanding the world.”

This trend towards media negativity is known as the MH370 Effect, named after the airplane that mysteriously disappeared in the Indian Ocean. Even though the total number of aviation incidents have fallen over the years, there’s a rising linear trend for relative media coverage about those incidents.

The tone of the news hasn’t just become more negative. It’s also biased towards extreme, one-time events such as crashes, explosions, press conferences, and dramatic deaths. For example, the media is relatively quick to report on shark attacks even though they only kill 10 people per year. In contrast, the same publications tend to ignore subtle disasters and slow-moving trends. Mosquitoes kill 725,000 people per year around the world, but they’re under reported upon because they aren’t as attention-grabbing as other animal-related deaths.

I’m not saying that news coverage should be a perfect mirror of reality. If it was, we’d read stories like “Sara watered the plants” or “Ted took the subway to work this morning, and it was crowded.” That wouldn’t help anybody. Moreover, certain events with “tail-risks,” such as diseases, deserve extra media coverage. Stopping the spread of viral phenomenons can hinge on how fast people change their behavior. And sometimes, newspapers need to dramatize the threat of a disease in order to kill it. For example, say every American newspaper covered a could-have-been-disastrous Ebola epidemic, which led to only two casualties. Despite the low number of deaths, we should celebrate the news for keeping us safe instead of condemning it for distorting our picture of the world.

Nevertheless, American news coverage distorts the most common causes of death and sickness. Two illnesses, cancer and heart disease, are responsible for more than half of American deaths. And yet, a survey of New York Times coverage from 1999-2016 found only 16 percent of news stories about death-related incidents focused on those two illnesses. Other serious risks such as Alzheimer’s, kidney disease, and drug overdoses are under-represented in the media while homicide and terrorism receive a disproportionate amount of attention even though they account for less than one percent of American deaths. Specifically, homicide is over-represented by a factor of 31. Terrorism, by a factor of almost 4,000. By giving disproportionate share of attention to sensational stories in order to attract page views, the media lowers social trust and can warp our model of real world risks.

 

 

Source:  Our World in Data


False Urgency: 24/7 News

“If you can’t dazzle them with brilliance, baffle them with bullshit.” — W.C Fields

Today, the tempo of news oscillates faster than a hummingbird’s wings.

The problem with daily news isn’t that it’s fake. It’s that we’re too close to the situation to see it clearly. Time gives us perspective, but the pressure journalists feel to share their hot takes makes cool and well-reasoned thought impossible. Even if most of the facts are true, stories in the daily news cycle are reported without the vital information you usually need to understand the story.

At the end of last year, I had lunch with a reporter at a major New York media company. As we dined over pizza and pasta in Midtown Manhattan, she told me about the demands of her job. Fresh out of college, she covers an industry beat for one of the major three-letter news organizations. (You know it. Guaranteed.) The success of her work is measured by page views. On average, her articles are read 500,000 times, and at the end of every month, she meets with the editor-in-chief who assesses her work and tallies up her monthly page view count. Her work spreads a mile wide and an inch deep. Sometimes, she publishes five to seven articles… in a single day.

When it comes to daily news, what’s good for business is bad for society. The current philosophy is built upon the fundamental lie that news is worthy of consuming every day. Daily news is profitable because it’s an unnecessary habit. Just like cereal, once people make a habit of eating it during their morning routine, they tend to maintain the habit. As one friend said: “I ate sugary cereal every morning for the first 18 years of my life and never stopped to question it.”


Result of False Urgency: Noah Effects vs. Joseph Effects

Since the news has such bias towards negativity, following media pundits is fun, but it’s mostly a waste of time. Media organizations are desperate for page views, so they increasingly capture our attention by creating urgency. In response, we’ve stopped listening because nothing seems significant anymore. In that way, talking heads are like the guy at a party who fills silences in conversation with his own voice.

Breaking news stories are irrelevant on the vast majority of days. But sometimes, television anchors are shouting because the course of history is indeed being altered before their eyes. Unfortunately, big headlines, gory photos, and breaking news labels have been overused. Now, the news struggles from “boy who cried wolf” syndrome. Audiences have been desensitized by the constant stream of disasters, so naturally, they tune out for the small percentage of stories that require their attention. With the exception of extreme circumstances, we should ignore the daily news. Or, as Nassim Taleb once said: “Do not read the newspapers, or follow the news in any way or form. To be convinced, try reading last years’ newspaper.“

My investor friends and authors like Taleb like to recommend a book called The Misbehavior of Markets. It’s about stocks, but the core principles also apply to the news. The authors, Benoit Mandelbrot and Richard Hudson, argue that humans yearn to find order in a world of chaos, even if that order is merely a product of their imagination. Thus, people invent patterns where they don’t exist and disregard contradictory information.

Worse, they overvalue the importance of recent experiences and rarely stop to look at the big picture. In the stock market, a small number of events drive the majority of positive or negative outcomes. Likewise, in life, a small number of events drive the lion’s share of important events. But the newspaper’s perspective is often one of relative equality. In times of war and peace, the length of a newspaper is the same, and in times of feast or famine, cable networks cover the news for 24 hours per day. In the day-to-day trenches of life, the world feels chaotic. But once you zoom out to a long-term perspective, the events that once seemed so important start to feel like inch-deep potholes on an interstate highway.

In an interview with the Financial Times, Mandelbrot distinguished between two kinds of events: Joseph effects and Noah effects:

“Joseph effects – seven fat years here, seven lean years there – occurred when markets were evolving gradually and continuously. Noah effects were cataclysms – the Flood, or the week of September 11 2001, when the New York Stock Exchange closed for five days and dropped 7.5 per cent on re-opening.”

Conflating Joseph effects with Noah effects is like comparing small ripples in a swimming pool to a tidal wave at a thunderous beach. The ripples are regular but inconsequential, while the tidal waves are rare but transformative.

The news looks for Joseph effects when it should really be focusing on Noah effects. A small number of events carry outsized influence, but obsessive news consumers are too close to the action to distinguish the two. Past a certain point, consuming more data hurts our signal-to-noise ratio and can actually decrease our ability to make smart decisions. When the rate at which we think our knowledge increases rises faster than it actually does, we overestimate our knowledge of the world, act with over-confidence, and make stupid mistakes.

When we direct our attention to the daily shouts of breaking news, we overwhelm ourselves with irrelevant data and uncommon events. We give rare events too much publicity, which distorts our model of the world. In turn, we mistake chance for certainty and the infrequent for the inevitable. Instead of enriching ourselves with the wisdom of history, we drive ourselves insane with the madness of the moment. In turn, we are overwhelmed by irrelevant data and infrequent events. Our cortisol levels spike, causing our hearts to beat faster than the bass at a Las Vegas nightclub. But when you avoid the news, you miss the junk while the important stories still reach your ear.

In that way, the news cycle is the equivalent of Slack messages in the workplace. The flashing ring of a new notification makes every message seem important. Each one captures our attention, which makes it impossible to work without distraction for an extended block of time. But in reality, the vast majority of Slack notifications are superfluous and unworthy of your attention. Likewise, the rush of breaking news is designed to capture our attention even though most stories are ultimately insignificant.

Growing up, I had two high school sports coaches: Sam and Miles. Sam coached basketball. He shouted the entire game. Winning or losing, he was always tense. Over time, we stopped listening to him. His words sounded like the train next to an apartment. Loud at first, but ignored over time.

Miles was my golf coach. He was a happy-go-lucky guy who never raised his voice. He ignored little details and always kept his cool, even in difficult circumstances. One day, I was late to golf practice because I chose to watch the end of an NCAA Basketball game during March Madness. He kicked me out of practice and threatened to suspend me from the team. I had never seen Miles act like this, so I took his concerns seriously and called him to apologize, apologized in-person again the next day, and I apologized the day after that. It’s been more than a decade since the event, and I still remember the disappointment on Miles’ face. The torrent of news makes us less like Miles and more like Sam.

The relentless chatter of talking heads force us to over-react to recent information and mistake noise for signal. We think the news is a wellspring of insight when it’s actually a theater of entertainment — contaminated with more drama than a Taylor Swift music video.

Unfortunately, it’s socially difficult to ignore the noise. Office water cooler conversations revolve around breaking news stories, where we’re expected to have an opinion on every news story. The uninformed cannot participate, especially in a world of daily email newsletters and endless Facebook feeds. But expecting the average news story to keep you informed is like expecting a bed of thorns to keep you cozy at night.

Yes, when a news story impacts your day-to-day life, you should follow it. If a hurricane is coming for your home town, you should follow that news; if changes to immigration policy will impact your visa status, you should follow it; and if people in your city are voting on an important new bill, you should follow it. By no means should you check out entirely. But open your eyes to the twisted incentives of the news industry and the dogmatic perversion of what it means to “be informed.”

Most news is like a jar of Pringles. It doesn’t encourage self-restraint, and the more we consume, the more we want — even when it makes us our heads ache and our stomachs twirl.


Information Overload: The Illusion of Knowledge

“The best lack all conviction, while the worst are full of passionate intensity.” 

— W. B. Yeats

If you knew nothing about human psychology, you’d think that the explosion of information would make us smarter.

I’m inspired by the optimism of early computing pioneers. Two people stand out: Doug Engelbart and J.C.R. Licklider. Engelbart, who contributed to the invention of the mouse, keyboard, and full-screen word processor, predicted that humans and computers would unite to think more powerfully than humans ever could on their own. Later, Licklider paved the way for the Internet in a 1963 memo to the Pentagon, where he outlined his vision to connect individual computers and time-sharing systems into a single, global computer network.

Like these visionaries, we assume that more information will lead to better decisions. Our priors aren’t entirely crazy, but our understanding is incomplete. Humans and computers collaborate best in bounded domains, such as chess and scrabble. Ask a chess master, and they’ll tell you they can’t compete against the world’s best artificial intelligence algorithms. Ask a stock market investor, and they’ll tell you an increasing number of investments are made by computers. Both domains also benefit from fast and honest feedback loops, just like sharing ideas on the Internet.

One of the biggest benefits of writing online is realizing how often I’m wrong about the world. Whenever I publish an essay, I’m surprised by how many people respond with well-reasoned rebuttals I’ve never considered. As the responses have increased, I’ve been humbled by my inability to predict the future — even though I’ve consumed more information about the world.

The march towards truth is a noble and worthwhile goal, even if we’ll never be able to understand everything about the present moment. Knowledge is the carrier of civilization. It’s the engine of progress, the story of humanity, and the torch we carry into the future. As Rene Descartes once said: “Reading good books is like having a conversation with the finest minds of past centuries.”

But past a certain point, our time is better spent escaping the turbulent news cycle, which ignores the wisdom of our ancestors and donates it to the cosmic vacuum of history. Instead, we should drink deeply from the well of classic fiction or soak up the ideas from field experts who double as writers.

My favorite example of the decreasing benefits of more information comes from a 1974 study by Paul Slovic, a world-class psychologist and peer of Nobel laureate Daniel Kahneman. In the study, Slovic tried to evaluate the effect of additional information on the accuracy of decision making. He tasked a group of horse gamblers to predict the winners of horse races. Gamblers who went from zero information to knowing the five pieces of information they wanted about each horse benefited from a significant jump in the accuracy of their predictions. But in subsequent rounds, additional information increased their confidence but not the accuracy of their predictions.

Adam Robinson, the founder of Robinson Global Strategies summarized the takeaways in a 2016 interview:

“Beyond a certain minimum amount, additional information only feeds — leaving aside the considerable cost of and delay occasioned in acquiring it — what psychologists call ‘confirmation bias.’ The information we gain that conflicts with our original assessment or conclusion, we conveniently ignore or dismiss, while the information that confirms our original decision makes us increasingly certain that our conclusion was correct.”

No human will ever be able to understand the world. It’s too complex, and we can’t see culture because we’re overwhelmed by its invisible influences. At best, we can build local expertise and useful — but ultimately inaccurate — models of the world. Past a certain point, additional information deludes us because it makes us think we understand the world more than we actually do.


Information Overload: The Paradox of Abundance

Food and information abundance create similar problems. It’s directly contributed to the obesity epidemic and the dumbing down of the American mind. Thus, abundance is a paradox. As environments of food and information show, environments of abundance are bad for the median consumer, but extremely good for a minority of conscious ones. Average consumers are doomed to the tyranny of instinct. Meanwhile, consumers at the top are propelled by unlimited access to nutritious food and information.

I call this the Paradox of Abundance.

 

 

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Attacked by the cut-throat competition of the daily news cycle, the news suffers from Gresham’s Law, a finance concept which states that bad money drives out good money until only bad money is left. Gresham’s Law can explain why the median consumer reads low-quality information online. On the Internet, low-quality content drives out high-quality content, as the most wide-read articles are polarizing and emotionally jarring. First, they distort the truth by eliminating nuance and adding emotional charge to important topics. If you check almost any major publication, the most popular stories are opinionated and fear-inducing. They draw us in because they sway our base-level instincts in irresistible ways.

The Explore Tab on Twitter is the most important newspaper in the world. It’s littered with celebrity gossip and exaggerated political drama — both of which yield a wide reach but incentivize empty content. And yet, as the Paradox of Abundance predicts, Twitter is also one of the world’s top intellectual communities. It’s the bedrock of my social and intellectual life. It’s a place to make friends, raise your ambitions, and connect directly with people at the top of their fields. And yet, most people use Twitter to consume information with no nutritional value.

In theory, a world of information abundance would bring the best to the top. Using a classic Econ 101 argument, competition should benefit consumers by improving quality. The more competition, the better. Practically, curation platforms would wade through millions of posts every day and highlight the best of the best. But that’s not what happens. On most platforms, low-nutrition content is the easiest to find and the most likely to be consumed. For example, superficial article recommendations sit at the bottom of thousands of articles, pollute the Internet, and tarnish the credibility of media publications.

 

 

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Source: Fortune Magazine

But in practice, the opposite has happened. Instead of informing the public, journalists are forced to game social media algorithms by spinning stories and writing misleading headlines. One reporter at Vox told me they have to write 10 headlines for every post they write. Vox chooses the headline that attracts the most engagement, depending on the platform. Desperate for clicks, reporters tend to shade their headlines with fear and outrage.

In line with the Paradox of Abundance, every social media platform makes it easy to betray its stated intentions. On Facebook, we try to follow our friends but perpetuate our loneliness; on Instagram, we preach body positivity. But when I talked to friends and look at their Explore tabs, I see mosaics of soft core pornography, streams of six-pack abs, and bikini bottoms pulled up to the belly button; and on Twitter, we “stay informed” by fighting with egg-headed avatars and scrolling with rage until we’re tipsy on Trump. Orwellian doublespeak.

Social media has a context of no context. Memes, nature, travel, sports highlights, fashion shoots, sneakers, advertisements, and dances can catch our attention before news of the death of a loved one. We stop. We put the phone down. We pause, quiver, start texting a friend, decide not to, tap back to the news, get bored, and keep scrolling to silence the pain. Memes, nature, travel… the endless scroll continues.

Beyond the numbing effects of social media, the hyper-competition for advertising dollars has slashed the average quality of a news article. Instead of moving away from tabloid writers and gossip columnists, journalists have become more like them. They’ve increased their publishing cadence and lowered their quality standards. In my podcast interview with Ryan Holiday, he told a story about a Washington Post blogging job which required at least 12 posts per day. Likewise, a beat reporter at a major New York news organization once said to me, “My job is to type faster than I can think.” True to Gresham’s Law, low-quality information drives out high-quality information.


Healthy News Consumption Is Possible

I. Track What You Consume

We become what we focus on. At the end of our lives, when our heads rests on the pillow for the final time, we will define our lives as the sum total of what we paid attention to.

The benefits of the Internet are only as strong as your ability to direct your attention. It’s a gift to people with self-control, but a curse to those without it. And while it hurts the average news consumer, savvy ones have never been smarter or more informed.

Just as tracking what you eat is the fastest way to improve your diet, tracking what you consume is the fastest way to improve your news consumption. Consume too much news from the same few sources and you run the risk of not thinking for yourself. The human brain is more programmable than we acknowledge and almost no news junkie can avoid its homogenizing orbit. Flock to the vortex of daily news and you’ll devalue your own observations and hand over responsibility for your baseline beliefs to the agenda of media moguls and large corporations. Of all the people I know, frequent news consumers are most likely to justify their intolerance towards fringe ideas in the name of tolerance.

As Allan Bloom wrote in Closing of the American Mind:

“Fathers and mothers have lost the idea that the highest aspiration they might have for their children is for them to be wise — as priests, prophets or philosophers are wise. Specialized competence and success are all that they can imagine.”

The pursuit of eyeballs follows a simple formula: Find a story that inspires fear and lather it with outrage. As you read this sentence, millions of Americans are held captive by the screaming sirens of misleading headlines and flashing-red breaking news alerts.


II. Focus on News That’s Close to Home

Trusting news anchors when they tell you that good citizens are well-informed is like trusting United Airlines when they say that you’ll waste your life unless you travel the world. Both stories have the ring of an exaggerated sales-pitch, even if they both have elements of truth.

If the news has a subliminal message, it’s to ignore what’s close to home — local issues and even our loved ones — and direct our attention to events we cannot influence, in cities whose names we can’t pronounce, in countries we can’t even find on a map. Obsessing over every news story isn’t as virtuous as the news tells you it is.

People are expected to have an opinion on every story, but even the experts don’t have enough time in the day to familiarize themselves with every aspect of every story. Without the time to research what we read, we confuse what’s true with what feels right.

Today, all political news seems to carry national weight. It focuses on personalities instead of the structure of government, pseudo-events instead of the mechanics of public policy. Families are torn apart over partisan debates where neither side knows anything about the political levers undercurrents beneath the conflict they’re riled up about or the history behind why things are the way they are.

In New York, where I live, people rarely discuss local politics. By focusing on the national news cycle, we ignore the much more tangible effects of aging infrastructure or the injustice of New York’s restrictive housing policies. In San Francisco, where I grew up, people step over homeless people on Market Street while they listen to The Daily and read about phantom threats while they silence their own desperation with noise-canceling headphones.

We act like the problem is always elsewhere in part because philanthropy and other forms of moral posturing have become performative instead of active, less about love and more about status — driven by people who want to appear virtuous without paying costs of living a virtuous life. We say we care about people, but lower our heads when they plead for help. We donate money instead of time and attention instead of sweat.

By obsessing over national politics and foreign, fear-mongering threats, we forget about the people right in front of us — our friends, our families, and the neighborhoods we call home.


Information Is Food

Just like the media, the cereal industry is best thought of not as a series of disconnected channels, but as a unified and interdependent system. They built distribution partnerships with grocery stores, monopolized the advertising airwaves, and influenced the U.S. Food & Drug Administration recommendations.

The relationship between news and cereal goes further. During a recent trip to Michigan, I pulled off the highway during a morning road trip to stop for coffee. The coffee shop I walked into advertised a sugar-filled, Red Bull Creme Freeze Smoothie on the door. I clenched my mouth in disgust as I entered the coffee shop. Unsatisfied with the menu of processed food, I only ordered a medium black coffee. When I returned to my car, I looked around the strip mall parking lot and saw 13 restaurants before me, all of which were fast food chains such as Taco Bell and Little Caesars. The parking lot was full of restaurants, but there were no healthy options. Americans are overweight, not because of scarcity but because of abundance — just like the news.

At the same time, wealthy and health-conscious Americans have never been in better physical shape. I’m struck by how healthy the food is in big coastal cities such as New York, Los Angeles, and San Francisco. The healthiest people I know control their diet with surgical precision. They have access to state-of-the-art workout facilities, wearable health technology, and fresh foods to match their dietary goals. They walk with six-pack abs and arms like the Incredible Hulk, while they walk with the can’t-lose swagger of Connor McGregor at a UFC fight.

News and food consumption are near-perfect metaphors. For starters, we already use terms like “food for thought,” “I need to digest an idea,” and “she has a thirst for knowledge.” This is also why writing is so healthy for the mind. Just as you’ll improve your food diet if you start cooking, you’ll improve your information diet if you start writing.

Just as eating healthy is an everyday battle, the Internet makes it hard to find nutrient-dense information. It’s absolutely possible, but it demands deliberate effort. The Internet increases variance in outcomes. More good and more bad.

If you serve as a mechanical slave to mass media and online algorithms, you’ll end up with intellectual diabetes. To find quality information, you have to rebel against the biases of news feeds and the incentives of mass media.

To be clear, I don’t think we should stop reading the news entirely. As a society, we can spend less energy following the news and become more informed about our society. The act of reading the news carries symbolic weight. People in power won’t fear the pain of journalist’s bite unless the news maintains its legitimacy. Likewise, even if reading the news isn’t an efficient way to learn about the world, the news industrial complex might be a necessary inefficiency in society. Even if the societal positives of reading the news are mostly symbolic, doing so increases the legitimacy of the fourth estate. But today, the pendulum of human attention has swung too far in the direction of compulsive consumption of superficial news. A large percentage of the time we currently spend consuming news would be better spent reading the work of independent researchers or following writers on Substack.

Make no mistake. For the conscious news consumer, there has never been a better time to be alive. The Internet is filled with high-quality information, so intelligent news consumers have access to more high-quality knowledge than at any point in human history.

So skip the news cycle, but double-down on measured consumption. Ignore society’s recommendations for what to consume and refresh your learning habits like you’re shaking an etch-a-sketch. Remember, what you should consume looks nothing like what you were taught to consume, so rebel against the mainstream spotlight, find some trusted curators, chart your own path instead.

Your ancestors dreamed about the gifts you take for granted, especially the wealth of knowledge on your smartphone: Wikipedia, Marginal Revolution, Substack, The Browser, Wendover Productions, PBS documentaries on YouTube, Farnam Street, Invest Like the Best, Crash Course, Marshall McLuhan interviews, Brain Pickings, Samzdat, Stanford class notes, Yale philosophy lectures, everything Michael Nielsen writes, Stratechery, Melting Asphalt, Our World in Data, Slate Star Codex, 3Blue1Brown, Gwern, Der Spiegel, Wrath of Gnon, The Stanford Encyclopedia of Philosophy, Paris Review interviews, The Portal, Edge, the Internet Archive, this collection of short books, and the best introductory books on basically every topic.

As the Paradox of Abundance makes clear, due to the abundance of information, the median information consumer is no better off than they used to be while the smartest people are smarter than they’ve ever been.

On average, the number of opinions we can express in public is declining because the fear of being shamed has sucked the intellectual oxygen out of the public sphere. But at the extremes, in online forums and group chats with people we trust, we are increasingly free. That freedom is spurred by ungated access to fringe theories and heretical ideas, which widens the range of ideas you can discuss in the private sphere.

Naval Ravikant, an angel investor who shares wise words on how to lead a healthy life, once said, “If you diet, invest, and think according to what the ‘news’ advocates, you’ll end up nutritionally, financially, and morally bankrupt.” The modern media environment helps a small number of savvy consumers, just as it destroys the lives of millions of mindless consumers who are paralyzed by fear, anger, and misinformation. Every day, the variance between them increases. Careful consumers use the information in their fingertips to compound their wisdom while compulsive ones drown in a volcano of fire-burning rage.

On the Internet, your rate of learning is limited not by access to information, but by the discipline to ignore distractions. The people you follow online is a leading indicator for your success, your health, and your happiness. Follow the right people, drink their recommendations deeply, and ditch the sugary cereal.


Behind-The-Scenes

Want to see how I wrote essay?

Once you enter your email, you’ll see a 35-minute, step-by-step video of how I wrote this essay.

I’ll show you how this essay developed from outlining, to writing a first draft, to organizing the essay, to making the final edits.

I encourage you to borrow my strategies, and use them to improve your own writing.


Acknowledgements 

Special thanks to the following people for the edits and conversations that led to this point: Jim O’Shaughnessy, Balaji Srinivasan, Kevin Simler, Jeremy Giffon, Will Mannon, Noah Starr, Austin Rief, Stewart Fortier, Graham Smith, Roxine Kee, and Salman Ansari.

And finally, a big thank you to my editor Kathleen Martin.


FOOTNOTES

 ¹ In the 20th century.

² When it came to major newspaper coverage of this, I was particularly impressed with The New York Times, The Seattle Times, and this article in the Los Angeles Times. These newspapers took time to explain the technical details of the MCAS system failure, whereas the engineers were generally quick to report on the technical details of why the Boeing 737 Max Crashed.

³ People who live in cities also underestimate the influence of talk radio in America. According to one Statista study, roughly 90 percent of American adults listen to the radio every week. Even if the best hosts are half a world away, they speak like they’re next to you in the passenger’s seat. Conservative opinions have historically dominated the talk radio airwaves. At his peak in the 1990s, Rush Limbaugh commanded the attention of 20 million listeners per week. And today, the voices of podcasts, AirPods, and YouTube add emotional fire to moments of solitude.

The Social Media Trap

This essay was originally shared in my weekly Monday Musings Newsletter.


People change their behavior when they know they’re being watched. And on social media, somebody can always look at you. 

We used to hand-write personal thoughts in our diaries. Even when we dropped our pens and spoke out loud, our thoughts never reached an audience bigger than the friends in our kitchen at Thanksgiving dinner. Even our peers who wanted to keep tabs on us weren’t able to track our every career decision like they can today.

Eugene Wei, the former director of video for Oculus VR at Facebook, says that posting on social media makes people feel like a public company. 

“Most celebrities learn this lesson very early on, most companies put their public-facing executives through PR training, but most humans never grew up under the watchful gaze of hundreds of millions of eyes of Sauron…Public companies are restricted in what they can say publicly. The same is true for people who take themselves public. The markets punish companies that stumble, and the judgment of the masses is no less harsh for individuals who do their thinking out loud on social media.”

Building personal brands has turned us all into public relations professionals. Public companies are notoriously risk-averse. Compared to private ones, they operate on short-term horizons and face more scrutiny when they make bold bets. In practice, we now have to justify risky career moves to our friends, so it’s often easier to follow the well-worn path, do what everybody else is doing, and guarantee the approval of our peers. 

Public companies and people on social media are always being watched. For public companies, the evaluation happens in the real-time movement of the stock market ticker. Meanwhile, people on social media are judged in likes, comments, and social status. Like the stock market, your social status fluctuates every time you post online. Post a photo of your six-pack abs on the beach in Tulum and your status will rise. Tell your friends that you’re leaving Goldman Sachs to join a growing and profitable company in rural Wyoming, and the backroom gossip will begin.    

As Jia Tolentino writes in Trick Mirror:

“Where we had once been free to be ourselves online, we were now chained to ourselves online, and this made us self-conscious.”

24/7 access to social media has over-socialized us. Every action is criticized, every sentence is scrutinized until soon, we get stuck in a prison of fear and risk-aversion. Plus, the Internet has a perfect memory. It only takes one tweet to end your career and permanently tarnish your Google search results. Like public relations professionals, we’ve become hyper-aware of how the masses will respond to everything we say and do. 

By creating an audience of critics, all those eyes have changed how we act. Psychologists call this the Hawthorne Effect, and it states that people change their behavior when they know they’re being watched. It was originally discovered in 1958 when researchers tried to study the effect of bright lighting on working hours and break times. Once the study began, worker productivity improved, but it slumped again after it ended. Researchers concluded that people worked harder not because of changing light conditions in the factory, but because they were being watched. 

Thus, surveillance is a tradeoff. Under the critical eye of the social media panopticon, people are more likely to follow the rules but also take fewer risks — which creates a stagnant society. 

On social media, we create our own Big Brother. The laid-back honesty users once had when posting on Instagram and Twitter in the platforms’ early days is gone now. Spend enough time on both platforms, and you’ll begin to operate with the tact of a corporate communications professional. Both platforms are performative. On Instagram, we judge every post by its impact on our public image, and on Twitter, we have to examine how our ideas will be interpreted by a wide range of audiences — today and in the future — with permanent records of everything we publish. Now that our failures are on public display, we’ve stopped taking risks. 

In 1984, George Orwell wrote: “The party told you to reject the evidence of your eyes and ears. It was their final, most essential command.” Stuck behind the bars of the Social Media Trap, streams of censorship turn into mental blood clots which prevent the flow of ideas. When we create for an audience of many, we censor ourselves and stop taking risks because we watch ourselves being watched.

Social media has turned us into objects of criticism. Instead of looking at the world, we watch ourselves being looked at. Like celebrities stuck in the prison of fame, instead of controlling our audience, our audience starts controlling us. Crippled by the thought of friends and family criticizing us behind our backs, we stop taking risks and collapse under the weight of paralysis. 

The problem is worse on social media platforms where we surround ourselves with people from our past. More practically, people would work on riskier but more ambitious projects if they left Instagram. Trapped by the judgment of our peers, we stop taking risks or trusting ourselves. Over time, the shouts of intuition turn into whispers, and soon, quiet. The self is silenced, the crowd screams, and yet, we hold our ear to the cacophony of judgmental noise. 


Seeking Solitude

“Every prophet has to come from civilization, but every prophet has to go into the wilderness. He must have a strong impression of a complex society and all that it has to give, and then he must serve periods of isolation and meditation. This is the process by which psychic dynamite is made.” — Winston Churchill

We’ve never had better access to technology, but we use social media to cripple ourselves. In a time when the world is starving for action-oriented risk-takers, we’ve stopped taking risks for fear of social rejection. Study the past, and you’ll see that many of the best opportunities are hidden in plain sight. At every point in human history, our ancestors have been deluded by grand fallacies and blind to grand opportunities. Find what we’re wrong about today. Then bet on your answers. Escape the Social Media Trap, and you’ll find the audacity to silence the critics and march with conviction. 

But in an age where millions of people are stuck in the Social Media Trap, how can we summon the courage to take a leap of faith? 

Spend more time alone. Our values are formed when we are by ourselves, so it’s hard to have original ideas the judgment of other people is always ringing in your mind. Too many schools teach students what to think, not how to think. 

If you insist on using social media, use it to motivate yourself, raise your ambitions, and hold yourself accountable. Curate your feeds, so you can inhabit a world of people who inspire you.

Most social environments reward conformity, but the world needs people with visions of a better future for society and themselves. It needs people who can shatter the chains of short-term judgment of the Social Media Trap. It needs time-travelers who can escape the solipsism of the present, apply the wisdom of history, and challenge the heresies of the present day. It needs people who can inject moral courage into their veins, follow their intuitive compass, and march along a foggy road towards a flourishing future. 


I publish a weekly newsletter called Monday Musings where I share ideas like this every week. You can subscribe here.

Audience-First Products

This essay was originally shared in my weekly Monday Musings Newsletter.


I was a senior in college, and it was time to look for a job. So, I went to my school’s job fair.

From the second I arrived, I knew the job fair was a dead end. Hundreds of job-hunting students walked around with the same blue suits, the same black portfolios, the same red pens, and the same lost expressions. The recruiters were advertising the kinds of jobs that knock the soul out of people—the kinds of jobs that inhale our young, talented people and turn them into cogs.

The numbers tell this story. According to a 2013 Harvard Business Review survey of 12,000 professionals, half of the respondents said their job had no meaning and significance.

A job at most of these corporations was a short-term win, but a long-term loss.

I wanted something different for myself.


My First Job

The Internet swallows up an increasing percentage of our leisure time, but people under-estimate the economic opportunities it presents — even for college seniors. For instance, the Internet is a better job matching tool than a job fair will ever be. Even in college, when I had less than 1,000 followers on Twitter, I could reach the kinds of decision-makers online I would have never met at a job fair. 

After I left the job fair, I committed to finding a job by using Twitter. The next week, I woke up late on a Tuesday morning and the rain was coming down sideways. I didn’t feel like going outside, so I skipped class to write a series of tweets about the future of online publishing. With them, I attracted the attention of Jason Stein, the CEO of Laundry Service, a New York-based advertising agency I wanted to work for. Impressed by my ideas, he replied with eight words that changed my life: “Interested in working with us when you graduate?”


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Ever since Jason’s unexpected message, I’ve used the Internet to create every meaningful professional opportunity I’ve had, including my first business.

First, I discovered the Internet was a better way to find a job. Then, I used the Internet to build my business. What follows is the three-step process I’ve used to create professional opportunities online.


The Rise of Audience-First Products

My method of “Audience-First Products” is still experimental, but I believe it’s repeatable. It’s a new way to test the feasibility of a business idea. It stands in stark contrast to the “old guard” model of attending job fairs, working mindless jobs to learn professional skills, and raising money before you start a business.

Here’s the three-step process I used to capitalize on the transition to the online economy:

(1) Build an audience

(2) Build a product

(3) Scale the solution

Here’s how it works.

Step 1: Build an Audience: Before the Internet, companies built products first, audiences later. Now, they build audiences before products. People are taught to hunt down interesting people, ideas, and opportunities. But masters of the Internet attract them. 

Sharing ideas attracts like-minded people who double as a feedback loop to make you smarter and more interesting. Through direct feedback, having an audience will give you a unique perspective on the world. You’ll receive instant, high-quality feedback on the ideas you share. 

Focus on resonance instead of scale. Most online metrics focus on how many people you reach, not the depth of relationships you build with them.

Ignore them, and make the Internet small instead. Define your interests. Then write about them. When you find a group that resonates with your writing and you want to connect with them, write for their interests. As you do, you’ll make it easy for others obsessed with that interest to find you. When you write in-depth about an off-the-beaten-path subject, you’ll attract people at the outer edges of the personality curve. Use it to shrink the world, and surround yourself with like-minded people. 

Define your own intersection of ideas by writing about topics nobody else is writing about and putting a name to your perspective. When you write about a specific topic, you’ll find you and your audience share common challenges that double as areas of entrepreneurial opportunity and topics to write about. As you write this way, you will define your unique lens on the world, share it passionately, and attract both casual friends and professional collaborators.

As you build your Audience-First Product, focus on resonance instead of scale. Most online metrics focus on how many people you reach, not the depth of relationships you build with them.

Step 2: Build a Product: Once you’ve built an audience, you can focus on the second step of delivering a product to them. There are problems everywhere. Nearly every service could be delivered with more joy, in a more efficient manner. Study any industry for long enough and you’ll find ways to improve it.

To build a product, you should solve a problem for your audience or yourself — ideally both.

To build for your audience, ask: “What product does my audience need to solve a problem they have?”

And to build for yourself, ask: “What product can I build to make my life easier?”

Regardless, the bigger the overlap between the audience you attract and the product you sell, the more successful you’ll be. For example, Nathan Barry built an email service provider called ConvertKit after building his online audience of people who wanted to learn about web design and building authority online. ConvertKit has always been designed for his creative process, so Barry’s always had an intuitive sense of how to build the product.

If people are continuously annoyed about something, there’s an opportunity to build a product. If an obvious customer pain point hasn’t been solved, there’s probably a reason why. But you’ll find economic opportunities in common problems people don’t know they have.

Peter Thiel famously asks: “What very important truth do very few people agree with you on?”

My answer is that writing online is massively underrated. It’s one of the world’s biggest arbitrage opportunities. Blogs have global reach, and the demand for quality ideas far exceeds the supply of them. But content creation is hard. Without structure or accountability, many people won’t be able to publish consistently. Until I started Write of Passage, nobody had claimed the niche for helping people write to accelerate their career. There were no methods, no frameworks, and no groups to support up-and-coming writers.

Write of Passage is the online course I wish existed when I started writing. The system would have saved me hundreds of hours in setting up a website, building a note-taking system, and refining ideas before I published them. I had experienced the benefits and challenges of writing online myself, so I didn’t have to do market research. I launched the course with a built-in audience of 10,000 email subscribers and 20,000 Twitter followers. Since I had organic reach, I didn’t have to pay for marketing.

If you have a built-in audience, you don’t need to raise money. If you write well about a common and specific problem, Google will send you lots of free traffic. Looking back, I could have de-risked the online course by commanding an early-bird fee to cover my expenses while creating the course. I thought I needed to raise money to start a successful business, because venture capitalists are too good at marketing for society’s benefit. I had spent too much time studying the loud tactics of venture-scale companies and not enough time studying the quiet successes of bootstrapped companies.

Step 3: Scale with Software and Contractors

If you define your processes, you don’t have to hire full-time employees. Depending on their complexity, you can outsource repeatable processes to personal assistants and software programs.

The robots are already here. But they’re packed in Northern Virginia data centers, and don’t look like the human-style robots we saw in iRobot. Automate processes with code whenever possible. If you know how to code, you can build your own software. If you don’t, you can automate repeatable processes with tools like Zapier. But beware of chasing automation too fast. Don’t lose the human touch where it matters. Don’t forget the feeling of receiving a survey about a flight you missed; don’t forget the feeling of receiving email with the wrong person’s name on it; and don’t forget the feeling of receiving an automated text message from a gym you no longer go to.

Once a process has been automated, it’s hard to fight back against that inertia. In particular, make sure your systems are mature before you automate customer support and communications.

Andy McCune is one of the most talented entrepreneurs I know. He spent his teenage years growing social media handles. His most successful one, @earth, has more than 1.5 million Instagram followers. At 24 years old, Andy just sold his company Unfold to Squarespace. The company was founded in 2018, and by the time it was acquired, Unfold users had used the app to create more than 800 million Instagram stories. The app had more than 25 million users, hundreds of thousands of which paid for the subscription of $2.99/mo or $19.99/yr. Best of all, they scaled the company with contractors instead of hiring full-time employees. At the time of acquisition, only three people worked full-time for Unfold, and Andy and his co-founder owned 100% of the business.

If you can’t automate a process with software, you can delegate it with contractors and personal assistants. They prefer well-defined projects and enjoy the repetitive tasks that drain the energy of an entrepreneur’s soul. As you work with them, ask them to refine and add detail to every process. The more granular the checklist, the better. That way, the process can be executed by any personal assistant, and eventually, by software.

This three-step process removes some of the risks of entrepreneurship without reducing the benefits to society.


Why now?

We’ve reached a tipping point for the creation of online businesses. First, it’s easier than ever to build an online audience. Future customers can find you on social media, stay connected with you through email, and build a relationship with you through articles and podcasts. Second, the number of no-code, plug-and-play software tools has exploded in the past five years. They’re almost all cheap to use at first, and the costs only rise as your business grows.

When I launched Write of Passage, there was no other school at the intersection of organizing your ideas, becoming a prolific writer, and working with a community to build an online audience. I launched Write of Passage with a built-in audience and without a lot of competition, so for the first year, I didn’t have to pay for marketing. I didn’t just have 10,000 email subscribers when I started selling the product. I had a trusted relationship with 10,000 people, many of whom saw me as an expert on writing online. Like a dam holding back water, there was a torrent of people who wanted to learn from me. Officially, there are only two people who work full-time on Write of Passage. But in another way, there are hundreds of people who do. The software tools I use are improving their products at a compounding rate, which gives me low-cost access to a “shadow work force,” and keeps my company small so we can move fast. Thus, there are actually thousands of people working full-time to improve Write of Passage.

Avoiding competition is the best way to build an Audience-First Product. You must solve problems other people aren’t trying to solve. Do something unique. Don’t be the 800th person to sell T-shirts on Instagram. When in doubt, don’t differentiate on branding or packaging either. The world doesn’t need another copycat product, and if you can blaze your own trail, your compensation will reflect that.

For years, we’ve been taught to make the Internet big. Go global. Scale-up your efforts. Create products for billions of people. More, more, more.

But there are other paths to success too. Use the Audience-First Product method to make the Internet small. By writing online, you’ll build a network around yourself and have a window into the ideas that ignite your soul. You become a magnet for like-minded people. Those people will share their best ideas, become your first customers, and help you grow your company.


Big thanks to the Ellen Fishbein for coaching me through this article.

The New American Dream

Shifts in technology lead to transformative shifts in human consciousness.

The last big one happened during the 1960s, after the arrival of television.. For the first time, images from faraway lands traveled into our living rooms. As Marshall McLuhan wrote, “The plight of the slum child, via the TV image, is increasingly extended to the entire population.”

The protests of the Vietnam War exemplify its cultural impact. The protests against it were so heated because Americans saw the blood of warfare and the tears of destruction with their own eyes through the television.

Today’s children have a new way of thinking. Instead of only consuming images and videos, they produce them for a global audience. Teenagers can use GarageBand to make music or high-definition smartphone cameras to make videos. Then, they can publish their music to SoundCloud or their videos to YouTube.

TikTok accelerated the trends. The algorithms on Twitter, Facebook, and Instagram are built upon the “friend graph,” meaning that people you friend or follow are more likely to show up in your feed. But TikTok works differently. The algorithm aims to deliver engaging videos — no matter who made them or where they come from. Away from the spotlight of friends and family, people on TikTok don’t feel the same pressure for perfection that stops them from sharing on other social media platforms. Thus, the percentage of consumers on TikTok who also produce content for the platform is much higher than other social media platforms.

The Internet is a global talent show, and TikTok is the American Idol contest. Anybody anywhere can go viral. Kids know this and grow up thinking about how they can make videos for the entire world. In an age of near-infinite information, their rate of learning is limited only by discipline — not access to information or instruction. Creators don’t need teachers or help from adults. The costs of failure are low, so they know to ignore the conventional wisdom that learning should come before doing. They take action, improve their craft, and follow the incentives of the algorithm — the same attitude that drives entrepreneurs.

But first, let’s focus on the state of the American Dream.


The Fall of the American Dream

The American Dream has suffered even as technology has improved. American dynamism is falling in almost every measurable way, partially because of globalization.

American industries felt the negative effects of globalization during the last three decades of the 20th century. Consider the car industry. The big three American car companies (GM, Ford, and Chrysler) had a virtual monopoly on the American car industry for 50 years, from 1920 to 1970. Then, foreign car companies such as Japan’s Toyota and Germany’s Volkswagen showed up and shook the market.

The effects of globalization rippled through the economy. International airlines and hotel chains led to an increase in travel, standardized shipping containers lowered the cost of transporting goods, and international trade agreements reduced the barriers to global trade. To be sure, globalization has room to continue to grow. Trade barriers still block the movement of goods, financial restrictions still block the movement of money, and Internet restrictions still block the movement of information.

As globalization emerged, the American Dream began to wither away. Some regions were hit worse than others. Today, American cities vary widely in the upward mobility prospects of their residents. In cities like San Jose or Salt Lake City, more than 12 percent of people who start in the bottom fifth of the income distribution will climb to the top fifth. But in cities like Atlanta and Charlotte, the odds of making the same jump from the bottom to the top are lower than five percent — less than any developed in country where we have data. 

As Harvard economist Raj Chetty has shown, the share of children who eventually earn more than their parents — one definition of the American Dream — is falling. 

Meanwhile, the American economy has shifted from a focus on tangible goods to a focus on intangible ones. In 1975, 83% of the stock market value for the average company came from tangible book value. But today, the influence of tangible and intangible value has flipped like a see-saw. Today, intangibles account for more than 80% of the average company’s market value.

What’s the difference between tangible and intangible goods?

Tangible goods can be touched. They include cars, food, and machines. Factories used to be loud. Now they’re silent. Due to the rise of robots and information technology, the percentage of Americans who work in manufacturing has fallen from 30 to 7 percent. 

In contrast, intangible goods are digital or abstract. They include patents, brands, and other intellectual property. The spread between tangible and intangible investment is closing because companies are investing more in intangible assets such as patents, brand names, and customer lists. Back in 1975, healthcare and information technology companies represented 12% of the market. Today, they represent 38%.

Knowledge workers now compete for jobs against a global army of labor. Naturally, many people are scared. Workers who live in low-cost regions are just as effective as those in high-cost regions at simple tasks, but since their cost of labor is so low, the low-cost workers can undercut them on price. When I started my career, the threat of foreign competition was my main motivation to work hard and build a differentiated skill set that can’t be trained at scale. In my work, I work with a course creator in Mexico and a podcast editor in Indonesia.

But with the threat of global competition comes the rise of global markets. Yes, you have to compete against global workers. But if you build a software product, it can scale to any corner of the world at zero marginal cost. In the Internet economy, achieving the New American Dream starts by taking advantage of the smartphone in your pocket and turning the scale of the Internet from a weakness into a strength.

Given the shifts in the economy, how can we revitalize the American Dream?


The Rise of the American Dream

Software-enabled businesses offer a path to the American Dream.

America is still the best place in the world to start a business. It’s home to six of the 10 most valuable companies in the world: Facebook, Microsoft, Apple, Amazon, Visa, Berkshire Hathaway, and Johnson & Johnson. Meanwhile, the United States is a cultural beacon for the world. America exports its customs through movies, music, and sports. American prospects loom large. In the entire history of humanity, there is no better place and time to live than the United States of America in the 21st century.

The Internet will catalyze an explosion of American entrepreneurship, driven by social, technological, and theoretical factors. 

I’ll take each in turn.

Social: Earlier this week, I had dinner with a friend from college who wants to leave his corporate job. When I asked him what he wants to do instead, he replied, “Start a business, of course.” His words echoed what Tyler Tringas said more explicitly: “The New American Dream is to build a profitable, sustainable, remote software business that can be run from anywhere, scales nicely, and prints money.” Starry-eyed dreamers have grown up seeing entrepreneurs like Tim Ferriss and Emily Weiss on the cover of Forbes and Time Magazine. Like them, some want to start major venture-scale businesses. Others want to bootstrap smaller franchises and software-enabled businesses with recurring revenue and comfortable margins. Those who can start profitable businesses are showered with the praise of social applause, which is amplified for everybody to see on social media.

Technological: The new creation tools are so powerful that they shorten the time it takes for people to go from novice to expert. Much of the knowledge that people used to need is now embedded in the software itself. Musicians, for example, once had to calibrate their ears to become tone literate. Now, GarageBand guarantees a pitch-perfect track and a consistent eight-count beat. Likewise, Unfold makes it easy for creators to publish beautiful Instagram stories because the app’s default settings guarantee a well-balanced image.

Almost all of these platforms have a Software-as-a-Service business model, so entrepreneurs who use them can pay little at the beginning and increase their commitment as their business grows. Here are some examples, inspired by Tyler Tringas:

  • Scalable Server Infrastructure: Heroku and Amazon Web Services

  • Social Media Platforms: Facebook, Instagram, Twitter

  • No Code Platforms: Zapier, WebFlow, Airtable, Shopify, and Squarespace

  • Basic Operations of Software Businesses: Bench Accounting, Stripe, ConvertKit, Gumroad, Zoom, GreatAssistant, and UpWork

  • Ways to Find and Validate Businesses: Traction, Lean Startup, Main Street

You no longer need to be an engineer to build a software-enabled business. I was able to teach more than 400 students in Write of Passage last year because of these tools. I run my live sessions on Zoom, integrate my APIs on Zapier, save my ideas in Evernote, host my curriculum on Teachable and my website on Squarespace, and communicate with you every Monday through ConvertKit.

Theoretical: We’re moving towards a more entrepreneurial economy, which will lead to an explosion of niche software-enabled companies. Investors like Fred Wilson and Marc Andreessen like to recommend a book called Technological Revolutions and Financial Capital. The author Carlota Perez studied the four major surges of technological development:

  • Industrial Revolution: 1771 – 1829

  • Age of Steam and Railways: 1829 – 1873

  • Age of Steel and Heavy Engineering: 1875 – 1918

  • Age of Oil, Autos, and Mass Production: 1908 – 1974

  • The Information and Communications Technology Revolution: Started in 1971 and still happening

According to Perez’s theory, these cycles unfolded in similar ways. As Jerry Neumann explained, “Each is characterized by some critical factor of production suddenly becoming very cheap, some new infrastructure being built, a laissez-faire period of wrenching innovation followed by a bubble, a post-bubble recession, a re-assertion of institutional authority, and then a period of consolidation and wide spread of the gains in productivity from using the new technology.”

Today, we are moving into the “Deployment Age,” characterized by widespread acceptance and application of the new paradigm of information and communications technology. For example, during the Age of Steam and Railways, technologies like the high-pressure steam engine, precision machine parts, and improved metallurgy transformed the global economy by reducing the cost of moving goods quickly and cheaply. Joint-stock companies were born, national markets were for trade and the repeal of tariffs preventing free trade led to economies of scale, and people moved away from their hometowns en masse for the first time. New businesses built upon these new foundations — in the same way, today’s entrepreneurs are building upon the foundations of new information and communications technologies.

Just as Perez’ theory predicts, the majority of companies in the coming entrepreneurship explosion will find markets with existing demand and serve them by integrating existing technologies. Crucially, entrepreneurs move away from risky exploratory projects and towards sustaining innovations with less technological volatility and fewer business failures. Companies created at the end of a technological paradigm are relatively low-risk because their products are cheap to fund and easy for customers to validate.

The combination of these social, technological, and theoretical forces have seeded the coming entrepreneurship explosion. These new companies will be built upon cheap software and founded in industries with low market risk. Thus, they’ll be mostly founded by bootstrappers, and those raise money won’t need much of it.

As predicted by my Naked Brands thesis, people on the Internet are increasingly becoming companies. Creatives use the Internet to shrink the world and connect with like-minded people at the tails of the bell curve for obscure interests. Building an online audience is already a leading indicator of entrepreneurial success.

There’s a clear market opportunity for schools, investors, and coaches who focus on teaching people how to create bootstrapped software-enabled businesses. Entrepreneurs with online audiences attract better employees, acquire customers at a lower cost, and benefit from developing specific knowledge in their area of expertise. 


I publish a weekly newsletter called Monday Musings where I share ideas like this every week. You can subscribe here.

What Should You Work On?

People aren’t deliberate enough about choosing what to work on.

To paraphrase the words of John O’Donohue, we are blind to the complacency that passes for ambition in modern society.

Too many of our smartest minds are working on trivial tasks and spending their time in corporations where they feel invisible. The vast majority of my friends who work for big companies say they’re bored, unchallenged, and under-employed. They don’t see the tangible benefits of their hard work.

Looking like you’re being productive is often a better strategy for career advancement than actually being productive. That’s why extroverts without conviction, many of whom spend more time networking than executing, rise to the top of the corporate hierarchy.

New ideas are fragile. Since they originate in the messy madness of intuition and the fringes of society, they don’t carry the crisp edges that rational critics look for. Forgetting this, we beat precious but unconventional ideas out of people before they have time to blossom.

As Peter Thiel once said:

“There’s a strange phenomenon in Silicon Valley where large levels of successful founders seem to have Asperger’s. You can turn that around as an indictment of society. What is it about society where if you don’t have Asperger’s, you’re talked out of ideas before they’re fully formed?”

Risk-averse parents and educators push children down conventional paths. Parents enroll their kids in the same schools and the same extracurriculars to help them get into the same colleges, so they can work for the same corporations. In 2007, more than half of Harvard graduates went to work in investment banking or management consulting. At Elon University, my alma mater, career advisors pushed us towards secure, but complacent careers at large corporations like three-letter media companies and the big-four accounting firms.

Too many of our top people aren’t putting their differentiated skill-sets to work. They graduate from the best schools in the world only to burn their attention on standardized checklists and the high school cafeteria game theory of corporate politics. Of course, this doesn’t apply to every person I know at big companies. But there are too many talented people who sleepwalk through their workday.

Entrepreneurship is one solution. Employment and independent research are two others. Unfortunately, the national rate of company formation in America has fallen, just as academia has become politicized and overly bureaucratized.

Right now, in order to do something truly innovative, you need to drop out of the system entirely or be so independent-minded that people call you a lunatic. In a time when it’s easier than ever to start a company, we should encourage people to identify the important problems society ignores and find scalable solutions to them — all while making a truck-load of profit.

Broadly, there are five buckets that talented people should start companies around: energy, education, housing, healthcare, and transportation. That’s because the western world has stagnated on all five fronts. For every sector except energy and sometimes housing, costs are rising faster than the rate of inflation.

We’ve made tremendous progress in other parts of the economy. Viral diseases have virtually disappeared, childbirth is safer than ever before, and we’ve improved semiconductors at a remarkable rate, which is why the phones in our pockets are now so powerful. But where the quality of life in America hasn’t improved, you can blame the five buckets of energy, education, housing, healthcare, and transportation. And because costs in these industries are rising faster than the rate of inflation, there are huge financial opportunities.

The government sets the laws for society, so it’s a wrap for all five buckets. And there, we can do so much better too. Politics doesn’t need to be the zero-sum game it is today. Because of its cut-throat nature, I know very few talented young people who want to work in government. We need more people like Dominic Cummings, a senior advisor to Boris Johnson, who is probably the most forward-thinking politician in the world today. Cummings borrows ideas from people like Bret Victor, Alan Kay, Philip Tetlock, Warren Buffett, and Charlie Munger while everybody else follows tired conventional wisdom.

Those who would work in government but choose not to say there’s too much red tape and the pay isn’t high enough, so they spend their time optimizing advertisements and selling copycat products instead. We don’t need a 17th bottled water brand at CVS or a 28th CliffBar competitor at Walgreens. We need our best and brightest people working on important problems that wouldn’t be solved otherwise.

Paradoxically, ambitious and differentiated goals are sometimes easier to achieve than mundane ones. Ambitious people attract other ambitious people. In positive-sum areas, they find ways to work together and help each other. That’s why inspiring goals make it easier to hire, raise money, and meet the kinds of people who can move the world with a single phone call.


I publish a weekly newsletter called Monday Musings where I share ideas like this every week. You can subscribe here.

Annual Review: 2019

The New Year is a time to stop and slow down. It’s a time to reflect on the previous year and plan for the upcoming one. Every holiday season, I reserve time to conduct an Annual Review.

We spend most of our lives in the trenches. We’re heads-down, focused on the people we love, the commitments we’ve made, and the work we’re responsible for. But once a year, we get a chance to reflect. I write about where I’ve been, where I’m at, and where I want to go. I approach this process with an attitude of loving criticism. That way, I can balance the frustration required to improve with the satisfaction of meeting my goals required to keep my energy high.

In the spirit of writing online, I want to share my experiences and publicly commit to my goals for the new year. This Annual Review is focused on four sections: (1) a review of my 2019 goals, (2) things to celebrate, , (3) things to improve, and (4) goals for 2020.


1. My 2019 Goals

Help 1,000 People Start Writing: My Twitter audience roared with excitement when I announced my vision to help 1,000 people write in 2019.  The idea for a course hadn’t entered my mind when I wrote the Tweet, and I don’t know if I’ve succeeded or not. I receive messages every week from people who write because of my encouragement, but I only taught ~450 people in Write of Passage this year. I could have taught 1,000 readers by lowering the price. But after making dramatic improvements to the course, we raised prices instead, which attracted an even more committed group of students.

Grade: B+

Publish Five Long Essays: At the beginning of the year, I had never published a proper long-form essay. I’ve always struggled to organize my ideas. Friends who edited my essays overwhelmingly told me that my ideas seemed disjointed. This year, I changed that. What the Hell is Going On was born out of a conversation at the Thanksgiving table, where I felt like all the grownups operated with an outdated model of the world. To date, it’s the toughest essay I’ve ever written. I followed it up with three other-long form essays: The Ultimate Guide to Writing Online, Peter Thiel’s Religion, and Why Did the Boeing 737 Max Crash? The Boeing essay was particularly well-written not because I improved my writing, but because I hired a professional editor to help me with it. We now work on every essay together.

Nevertheless, I’m going to fall short of my goal to publish five long-form essays. The fault is mine. I abandoned my daily writing habit from mid-September to mid-November. By doing so, I disappointed myself. For those two months, I over-committed myself, turned my attention to the operations side of Write of Passage, and woke up too late to write while the world was quiet. I’ve published four essays but still struggle with organization. I’ve re-organized my 25,000- word news essay four times. I’ve hired a writing coach to help me structure my ideas in conversation before I devote the time to writing them. Long-form essays may be out of fashion, but they attract kind, loyal, and intelligent readers.

Grade: A-

Naked Brands Book: Naked Brands was the first viral article I ever wrote. At the beginning of the year, it was the idea I was most known for. To research a potential book, I launched a Naked Brands Interview Series, but it never took off, in part because I lost enthusiasm for the idea. Furthermore, the success of Write of Passage pushed me to drop the Naked Brands idea and pivot towards online writing, where I can help many more people.

Grade: N/A

25,000 Email Subscribers: I don’t know if I underestimated the difficulty of reaching this goal or if I didn’t work hard enough to do it. As I write this, I have 15,300 email subscribers. To be fair, I started the year using a bare-bones email service provider and knew almost nothing about email marketing. Switching to ConvertKit was a smart first step, but I didn’t get into the mechanics of email subscriptions until November when I signed up for Brennan Dunn’s Mastering ConvertKit course. I didn’t even make my first lead magnet until December. Even though the quality of my emails improved, I didn’t do the necessary work to grow my list.

Grade: C

50,000 Website Visitors Per Month: Nailed it. And I exceeded my goal. My goal was to increase the number of page views on my website without reducing the quality of my writing, and I think I succeeded. Nevertheless, my goals changed throughout 2019. At the beginning of the year, I mostly cared about having a large audience. But now, I care much more about attracting the right people. I measure the success of my posts by the quality of students in Write of Passage and the number of interesting emails I receive.

Grade: A+


2. Things to Celebrate

Write of Passage: I still can’t believe the success of Write of Passage in 2019. I teamed up with Tiago Forte at the beginning of the year, and we decided to meet in Mexico City to structure the course and film the modules with a film crew from Los Angeles. The first two cohorts were a good start — we had enthusiastic students and thoughtful discussions. But as with any new venture, parts of the course were shaky and incomplete. However, after the second cohort, an alumnus named Will Mannon called me with a list of suggestions for how to improve the course. Instead of implementing them myself, I hired him to do it. By obsessing over the student experience, he made dramatic improvements to the course. In fact, his work was so good that I hired him full-time.

The third cohort featured 200 students from 28 countries, including Panama, Nigeria, and Indonesia. In just 10 months of working on Write of Passage, I’ve taught almost 500 writing students and built a global community of online writers.

Of all the messages from students, this one is my favorite:

Write of Passage might prove one of the best career decisions I’ve ever made. Six weeks ago, I began Write of Passage with vague notions of what I wanted to accomplish. Today I emerge with a razor-sharp niche, weekly newsletter and a strategy to succeed. I feel like I’ve undergone a creative exorcism and been plunged into an ice-cold bath, but it’s amazing.”


Making  Write of Passage  with Tiago Forte

Making Write of Passage with Tiago Forte

My Partnership With Tiago Forte: You won’t find a better person than Tiago. The working partnership I developed with Tiago Forte was the highlight of the year. We met on Twitter in March 2017, when I asked to record a podcast with him. Our conversation continued for more than an hour after the recording ended, and Tiago invited me to participate in the next cohort of his Building a Second Brain course that August. I enjoyed the course so much that I became a New York City ambassador and hosted local meet-ups for alumni. As our relationship improved, we sensed an opportunity to create a writing-focused course together, and we actually did it. We told our story on one of the most popular episodes of my podcast in 2019.


Me and Tiago in New York City

Me and Tiago in New York City

Writing: In 2019, I focused on publishing in-depth essays on my website and writing weekly messages in my email newsletters. I successfully did both. Two essays, What the Hell is Going On and Peter Thiel’s Religion were particularly popular. Combined, they hold more than 30,000 words and have received more than 200,000 page views. Beyond those long-form essays, my most popular articles of the year were Learn Like an Athlete, Why Did the Boeing 737 Max Crash, and The Ultimate Guide to Online Writing

Some other statistics:

  • 13 Friday Finds newsletters

  • 29 new articles

  • 52 Monday Musings newsletters

  • 533,000 unique visitors

  • 1 million page views


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Friendship: I’ll remember 2019 as the year of tremendous friendships. My first few years in New York were surprisingly lonely. Even if the city is full of people, it lacks community. Most people build friendships at work or in their co-working space, but I’ve worked at home for the past couple of years.

I’ve also tried to surround myself with kind and intellectually curious people who enjoy long conversations about provocative ideas. A few friends had a particularly impactful impact on my life. This list is by no means exhaustive, but a few people have blown me away with more love than I deserve.

I saw Lyn more than times than any other person this year. Together, we conducted weekly Bible studies, attended Tim Keller’s excellent eight-part Questioning Christianity series, and co-hosted a weekly Questioning Christianity group. Even though she’s a couple of decades older than me, I’ve developed a trusted relationship with her and her family. From a friendship perspective, this was the best surprise of the year.

I’ve learned that close friendships are built by spending multiple days at a time with people. This year, I shared an apartment with Alex Hardy, worked with Sid Jha, spent two days with Brent Beshore in Missouri, five days in Mexico City with Will Mannon, five days in Michigan with Kevin, six days in Toronto, Chicago, and Los Angeles with Nik Sharma, seven days with Eric Jorgenson in Missouri and Michigan, eight days with Zander Nethercutt in Michigan and Missouri, and 10 days with Brendan and Yassine in Morocco. Beyond that, I built tremendous friendships with Adil Majid, Cameron Porter, and Jeremy Giffon — all of whom I see on a near-weekly basis.


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Christianity:  I explored Christianity than any other subject. In addition to the aforementioned discussion groups, I wrote a 15,000-word essay, inspired by the work of Renée Girard, about Peter Thiel’s Christian influences. Even when we write about others, we write about ourselves. Through this essay, I developed an appreciation for religion and grappled with my own relationship to faith.

Travel: My 2019 travels were mostly constrained to North America. The year began with a four-day work trip to Toronto, where I recorded podcasts with Andrew D’Souza and Alex Danco. Then, I traveled to Chicago for podcast interviews with Nick Kokonas and Jason Fried. During the summer, I visited Los Angeles, where I recorded podcasts with Mason Hartman and Jeff Morris Jr. Instead of spending time in Santa Monica as I usually do, I spent most of my time in Burbank and West Hollywood.

Right around that time, I saw a Tweet showing that Michigan used to have five of the 10 wealthiest cities in America but now has zero. Sensing a fascinating sociological shift, I made plans to see the entire state of Michigan. During an 18-day stint, I visited almost every major city in the state, including Traverse City, Grand Rapids, Lansing, Ann Arbor, and Detroit. The Ford Factory in Dearborn, Michigan was the highlight of the trip, along with back-to-back days at Arcadia Bluffs — one of the prettiest golf courses I’ve ever played. Finally, I’m writing this annual review from Mexico City during my second Mexico trip this year. In February, Tiago Forte and I flew down a Hollywood film crew for 10 days while we recorded the lecture videos for Write of Passage. I’m back now for 2020 planning for Write of Passage and my Annual Review Workshop with Tiago.


Speaking with Morgan Housel, Jim O’Shuaghnessy, Christie Hamilton, and Eric Balchunas at Bloomberg in Washington D.C

Speaking with Morgan Housel, Jim O’Shuaghnessy, Christie Hamilton, and Eric Balchunas at Bloomberg in Washington D.C


3. Things to Improve

Home-work balance: I moved to a bigger apartment in Williamsburg, so I could upgrade my home office. On the positive side, the apartment is a major improvement and the location is exceptional. But I still work from a desk in my room. Since my computer is so close to my bed, I’m unable to calm down at night and rarely close my eyes before 1 a.m. Beyond that, I’d like to record more videos, but my room doesn’t have enough space to do this. So I’d like to find a dedicated workspace next year where I can film videos, record podcasts, and find a flow state while writing. To be honest, I can’t tell if a work-reserved space is a frivolous luxury or a major productivity and happiness boost.

Delegating Operations: Online course instructors are part marketers, part educators, and part operators. I enjoy marketing and teaching the most, but as the course has grown, I’ve had to devote more energy to operations. In an ideal world, I’d devote all my waking time to learning, creating, and building relationships. But in the past few months, I’ve devoted too many hours to nitty-gritty operations where I don’t perform well because I’ve never been detail-oriented. The more I can delegate operational tasks to people who are more competent than me, the better. I’ve already made some improvements. I hired an editor to improve my writing, a personal assistant to take care of basic tasks, and a full-time course manager to manage operations and improve the Write of Passage student experience.

Time for Writing: Writing is the most productive thing I do. Publishing articles improves my thinking, grows my business, and attracts incredible people into my life who I’d never meet otherwise. But it’s a time and energy-demanding activity. And since my writing often falls into the “important, not urgent” category, I tend to neglect it. This year, I made a goal of writing for 90 minutes per day. But on most days, I wasn’t able to for the reasons mentioned earlier. Now I’ve found relevant solutions. And to improve the quality of my output and the quantity of my essays, I plan to make changes for 2020. First, I’m going to raise my daily writing goal from 90 minutes to 120 minutes per day. To do that, I’m committing to a dedicated writing time from 9:30-11:30 a.m. every day. And finally, I’m going to track my daily progress with this daily writing tracker, which you can download here.

The Podcast: I’ve fallen out of love with the podcast. Each recording is a logistical pain, it doesn’t feel innovative enough, and it’s not growing as fast as I’d like it to. I’ll describe each challenge in turn. I record most of my conversations in Manhattan. I have to lug all my equipment around the city for each episode, which is unenjoyable and stressful because I don’t want somebody to steal it. Fortunately, I found a recording studio in Manhattan that I plan to use next year.

For years, the podcast was a standard interview show. But now, it feels repetitive and too much like the others. I’m blown away by the quality of Eric Weinstein’s conversations on The Portal and hope to emulate some of his conversational tactics next year. Additionally, the podcast didn’t grow much this year, and I don’t know why. Next year, I’ll aim to grow the show by spicing up the conversations, promoting it more on email and Twitter, and appearing more on other podcasts where I can mention my own. Nevertheless, I’m still frustrated because I still feel like I’m missing some low-hanging marketing fruit.


on’t think I’ve ever met somebody as inspiring as  Eric Weinstein . I haven’t been the same since our conversation — and all for the better. What an exceptional person.

I don’t think I’ve ever met somebody as inspiring as Eric Weinstein. I haven’t been the same since our conversation — and all for the better. What an exceptional person.

Email Growth: Email is the bread-and-butter of my business. I didn’t miss a single Monday Musings or Friday Finds. I overvalued the benefits of social media followers and under-valued email. The good news is I switched from Substack to a more advanced email service provider called ConvertKit. (To my embarrassment, I accidentally sent an email to my entire list during my first week on the platform.) By switching to ConvertKit, I’ve segmented my list into specific audiences and send them emails based on their interests. Unfortunately, my list didn’t grow as fast as I would have liked. It’s 100% my fault. I didn’t dedicate the time or attention to growing my list. I also didn’t publish frequently enough or create lead magnets for the website. Email list growth should have been a bigger priority. Next year, I plan to work with an email consultant to grow my list and create a better experience for my readers.


4. Goals for 2020

Setting goals is a delicate balance. I want my life to be productive but surprising. At the New Year, I set bold, big-picture goals at the outer edge of my capabilities. That way, once I’ve defined my general orientation, I can work small and iteratively throughout the year. If my goals are too loose, I won’t achieve them. But if they’re too concrete, I’ll give up serendipity and lose the flexibility to change direction as I learn.

I am emotionally driven to my core. I relish the surprising messiness of everyday life and the ability to pivot fast when new information comes to light. In the past, whenever I’ve tried to be too rational, I’ve rebelled against myself.

Until I worked with Tiago Forte, I didn’t know how to properly set long-term goals. He taught me to commit to focusing on the ends, not the means of achieving goals.

Until I worked with Tiago Forte, nobody taught me how to properly set long term goals. He taught me to commit to focus on the ends, not the means; to walk towards predetermined end states without becoming attached to the process of achieving them.

At a more concrete level, goals should be explicit and easy to evaluate. Every goal should be clear and concrete enough to evaluate with a “Yes, I achieved it” or “No, I didn’t” by a specific end- date.

Every goal should serve me, my family, and my students. And since I’m a creator, they should all create new knowledge. Earlier this year, I turned down an opportunity to co-found a company. The founder wanted to stay in stealth mode, so I wouldn’t have been able to write about it (which can create knowledge). The company is thriving, but I don’t regret my decision. The more I can share what I learn through writing, the better.

I use emotional cues and consider the potential end results to drive my goal-making process. Every goal should be so ambitious that I can’t even sit down while thinking about it. The soup of nervous energy should come from a stew of nervousness, excitement, and grandeur. A goal isn’t grand enough unless it makes me say: “I can’t believe I’m actually going to do this.”

Life will always be more interesting than anything I can imagine, provided I keep my heart open to the sweet song of serendipity.


Hassan II Mosque in Casablanca, Morocco

Hassan II Mosque in Casablanca, Morocco


What I Plan to Achieve

Enroll 800 Write of Passage Students: I’ve never believed more in the benefits of writing online. And the student experience is better when the course size grows, provided that everybody who attends is curious and committed. Write of Passage will be offered in three separate cohorts in 2020, so on average, each cohort should have almost 300 students. Achieving this goal will require a tremendous marketing effort, with a particular focus on mastering launches. To achieve this goal, I plan to refine my launch checklist, add a host of digital workshops, and work with coaches who can teach me best practices.

60% Write of Passage Completion Rate: Write of Passage won’t improve the world unless we increase completion rates in addition to growing the size of the cohorts. Online courses are famous for terrible completion rates, but we plan to transcend those norms. First, we’ll increase alumni engagement. Then, we’ll add small writing groups and foster student-to-student friendships. By being more engaged with one another, more students will complete the course.

Additionally, the more feedback we can receive from students, the better. We plan to increase student feedback through email, Zoom breakout rooms, and one-on-one phone conversations.

120,000 Words on My Website: The Internet rewards people who are prolific. If I write 120,000 words, it’ll be equivalent to two average-length books. I’ll keep the word-count strict, so I can freely navigate between short and long-form essays. Up to a certain point, quality and quantity aren’t at odds with each other, so the more I publish, the faster my writing improves. I’d like to publish more, but must cater to the demands of running an education business.

200,000 Page Views and a 10-Minute Average Reading Time on Secret Essay: This is the coolest and most ambitious essay I’ve ever worked on. Inspired by Tim Urban’s series about Elon Musk, I plan to publish an alternative-style biographical essay on a public figure I admire in 2020. The goal of 200,000 page-views will force me to clarify this person’s ideas, while an average reading time of 10 minutes will encourage depth and rigor in my research process.

50 Days of 1-on-1 Time with Friends and Family: Nothing makes me happier than long conversations with wonderful people. Over the past three years, I’ve prioritized meeting new friends. By almost all accounts, I’ve succeeded at meeting new people. But during those years, I spent more time meeting new people than deepening relationships with the people I already knew. It’s time to change that. For the first time in my life, my desire to meet new people has fallen. I want to build relationships with the people I already know instead. I want to write with them, eat with them, and travel with them. I want to spend long hours with my closest friends, and see them for days at a time. In 2020, I plan to spend 50 days in quality one-on-one time staying with close friends or family members.

Visit Three New States and Three New Countries: The best way to achieve multiple ambitious goals is to combine them. Next year, I hope to spend more time on the road with a different friend every trip. In America, I’d like to visit Alaska, Maine, and Massachusetts. People rave about the beauty of Alaska and Maine, but I’ve been to neither. And in Massachusetts, I’d like to visit Boston, Nantucket and Martha’s Vineyard. Abroad, I’d like to travel to India, Japan, and Singapore. The center of economic gravity is moving to East Asia, so I’d like to study their cultures and governance systems. If I could add two countries to this list, I’d add China and Taiwan.

I’m proactive about traveling domestically and reactive about traveling abroad. Traveling across America is easy because the culture is so familiar to me. But the quality of trips abroad are determined by the people I travel with. For example, my trip to Morocco was a success because my friend Yassine speaks fluent French and Arabic and frequently hosted road trips across the country when he was younger. Thus, he planned the entire trip and hosted us at his childhood home in Casablanca. If a similar opportunity presents itself, I’ll jump on it.

50,000 Email Subscribers + 50% Open Rate: As I mentioned before, the strength of my email list strongly correlates to the success of my business. In addition to feeling comfortable on ConvertKit, I finally understand how to create lead magnets, segment readers, and produce high-quality emails every week. Fifty percent of subscribers open Monday Musings every week, while Friday Finds’ open rate is usually north of 70%. But now, it’s time to focus on list growth. As I write this, Monday Musings reaches 13,500 subscribers. But by the end of the year, I want to grow that number to 50,000. I’ll start by creating lead magnets for all the most popular articles on my website. Then, I’ll hire a coach to inform the execution process. And if I have the resources, I’ll build a referral program inspired by Morning Brew.


Helping the butcher in a Moroccan market

Helping the butcher in a Moroccan market

Beyond these concrete goals, I’d like to improve upon a number of habits:

  • Go to sleep earlier: I work at home alone during the day, so all my socializing happens after work. I don’t usually meet friends until 7 p.m., which means I don’t usually come home until 10 p.m. Moreover, even without coffee, I have too much energy to read during the day, so late nights are reserved for reading. As a result, I don’t usually close my eyes until 1 a.m, which means I don’t wake up until 9 a.m. Ideally, I’d be in bed by 10 p.m. and up at 6:30 a.m. But given the realities of my life in New York, an earlier sleep schedule may not be possible or desirable.

  • No caffeine after 1pm: I have an irrational joy for the froth of a flower-topped latte. On most days, I don’t leave my house until 2 p.m., so when I treat myself, I tend to stay up later than I’d like. But avoiding caffeine (even decaf) is a smart sacrifice to make. In the new year, I’ll replace caffeine with tea in the afternoons.

  • Finish a Spartan Race Trifecta: I enjoy the challenge of weight-lighting but panic at the huff-and-puff of cardio. But before my first Spartan Race in November, my fear of failure overwhelmed my hatred of cardio, and I changed my fitness habits. In order to complete a Spartan Race Trifecta this year, I’ll have to ramp up my cardio.

  • Reduce alcohol consumption: As a society, we should drink much less alcohol. New York has a heavy drinking culture, especially among people in their 20s. I drank a lot when I first moved to the city, but I’ve since slowed down. My moment of introspection came on July 3 2018, when I had way, way, way too many drinks at a party. Since then, I’ve only had one hangover. I’ve also started sleep tracking and have since seen that my sleep quality goes down after only one drink. My resting heart rises and my REM sleep disappears. In 2020, I’ll reduce my alcohol consumption by drinking tea and seltzer water instead of beer and cocktails.

  • Two hours of writing per day: Writing is the most productive activity in my life. Through it, I improve my thinking, grow my business, and attract quality people into my life. Ironically, I don’t like writing. It’s never come easy to me, but that’s exactly why I’m able to teach it. In the past year, too much of the energy I would have spent writing went to operations for Write of Passage. But now that I’ve hired an excellent director of student operations, I want my time back. In 2019, I had a goal of writing for 90 minutes per day. But next year, I plan to raise write for 120 minutes — two hours per day.


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Memories

Best Surprise: The Beauty of Northern Michigan

Best Meal: Chicken and Waffles with Sid at Roister

Coolest New Experience: Speaking at Bloomberg in Washington D.C

Favorite Weekend: A conference in Sea Ranch, California

Favorite First Meeting: Austin Rief

Favorite New City: Detroit

Favorite Sports Moment: Tiger Woods winning the Masters

Favorite New Golf Course: Arcadia Bluffs (Bluffs Course)

Favorite Work of Art: The Diego Rivera Murals in Detroit

Favorite Tour: The Ford Factory in Dearborn, Michigan

Favorite Day: Zander’s birthday at Arcadia Bluffs

Most Intense Week: Creating Write of Passage

Favorite Travel Experience: God’s Bridge hike in Morocco

Favorite Artist: Above & Beyond

Favorite Song: Lonely by Illenium

Favorite Songs: Spotify playlist of my favorite songs of 2019

Favorite Concert: Illenium at Madison Square Garden

Favorite Quote: “When is the last time you had a great conversation? A conversation that wasn’t just two intersecting monologues, which is what passes for conversation a lot in this culture? But when you last had a great conversation, in which you overheard yourself saying things you never knew you knew, that you heard yourself receiving from somebody words that absolutely found places within you that you thought you had lost, and a sense of an event of a conversation that brought the two of you onto a different plane, and then, fourthly, a conversation that continued to sing afterwards for weeks in your mind? And I’ve had some of them recently, and it’s just absolutely amazing. They’re like, as we would say at home, they are food and drink for the soul.” — John O’Donohue


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Coolest Things I Learned in 2019

I write a weekly email called the Monday Musings.

The most popular part of the newsletter is a section called “Coolest Things I Learned This Week.”

It’s fun and eclectic, interesting and intriguing. This is a collection of the most popular ideas I shared in 2019.

Subscribe here if you want to see ideas like this every week.

Note: I’ve lost some of the sources for these factoids. If you see something that’s yours, and you’d like me to credit you, please email me. Happy to make the change for you.


Find Your Tribe

“One of the best pieces of advice I ever got, back when I was 23 and newly out of school, is this: look around and figure out who you want to be on your team. Figure out the people around you that you want to work with for the rest of your life. Figure out the people who are smart & awesome, who share your values, who get things done — and maybe most important, who you like to be with and who you want to help win. And treat them right, always. Look for ways to help, to work together, to learn. Because in 20 years you’ll all be in amazing places doing amazing things.”


Writing: The World’s Best Networking Activity

Writing is the most scalable professional networking activity – stay home, don’t go to events/conferences, and just put ideas down.

Building your network, your audience, and your ideas will be something you’ll want to do over your entire career. Think of your writing like a multi-decade project.


Marriage

I’ve noticed a weird pattern: In most of the best marriages I see, one person is an early-bird, and the other is a night-owl. They have opposite circadian rhythms.

I think this is healthy. The two partners get the benefits of time together and time alone, which helps the marriage.


Boosting Productivity

Small increases in productivity have a huge long-term impact. From Nick Bostrom:

“Imagine a tool was invented to help a researcher to improve by just 1%.

The gain would hardly be noticeable in a single individual. But if the 10 million scientists in the world all benefited from the tool, the inventor would increase the rate of scientific progress by roughly the same amount as adding 100,000 new scientists.

Each year the invention would amount to an indirect contribution equal to 100,000 times what the average scientist contributes.”


New York City Looks Like a Movie When it Rains

These photos are spectacular.

Here’s the photographer’s website.

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Intellectual Fashion

  1. “A pattern I’ve seen in many different fields: even though many people have worked hard in the field, only a small fraction of the space of possibilities has been explored, because they’ve all worked on similar things. Even the smartest, most imaginative people are surprisingly conservative when deciding what to work on. People who would never dream of being fashionable in any other way get sucked into working on fashionable problems.” — Paul Graham

  2. “It has always appalled me that really bright scientists almost all work in the most competitive fields, the ones in which they are making the least difference. In other words, if they were hit by a truck, the same discovery would be made by somebody else about 10 minutes later.” — Aubrey de Grey


The Popularity of Smoking

  1. It’s crazy that people used to smoke cigarettes on airplanes. In fact, the history of cigarette bans is surprisingly recent. According to Wikipedia, “the U.S. ban on inflight smoking began with domestic flights of 2 hours or less in April 1988, and to all domestic and international flights in 2000.”

  2. The U.S. Army used to give cigarettes to every soldier.

  3. Cyclists in the Tour de France used to smoke to increase blood flow, according to my friend Brendan.

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Ford Motors

From 1908-1916, Ford increased production of the Model-T by 40 times in just 8 years, while more than halving its price.

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Where Music Labels Make Money

I enjoyed reading this leaked Sony Memo. Catalog music (which includes reissues, live albums, and greatest hits albums) provides the majority of the revenue in the music business.

Here what stuck out from the memo:

  • For Sony, catalog provides 50% of the revenue and 200% of the profits of recorded music.

  • “Streaming revenues tend to be more heavily weighted to catalog. Pandora and Spotify are probably 65% catalog under this definition. Licensing… is mostly catalog as well. Therefore, if Sony Recorded Music (ex-Japan) is doing $250MM in EBITDA today, catalog is probably generating approximately $500 MM and the new release business, which is 98% of the headcount, is losing $250MM per year.”

  • “The catalog is also primarily generating this revenue off “deep” catalog that is at least 5 years old or older. The great classics of pop music are stable earners, much like the consistent songs that generate most of the music publishing revenues.”


Against the Majority

1. “The majority is always wrong. The minority is rarely right.” — Henrik Ibsen

2. “If everybody is thinking alike, then no one is thinking.” — Benjamin Franklin


What Kobe Bryant Reads

“I made a point of reading the referee’s handbook. One of the rules I gleaned from it was that each referee has a designated slot where he is supposed to be on the floor. If the ball, for instance, is in place W, referees X, Y, and Z each have an area on the court assigned to them.

When they do that, it creates dead zones, areas on the floor where they can’t see certain things. I learned where those zones were, and I took advantage of them. I would get away with holds, travels, and all sorts of minor violations simply because I took the time to understand the officials’ limitations.”


Where is Wealth Concentrated?

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Art Crime

Art crime is far more widespread than you might guess.

By some estimates, more than 50,000 pieces of artwork are stolen each year, amounting to annual losses of around $6 to $8 billion globally. This makes art theft one of the most valuable criminal enterprises around, exceeded only by drug trafficking and arms dealing.

Forgery — a somewhat more difficult phenomenon to estimate — results in a regular drumbeat of scandals at auction houses and museums every year.


The Genius of Unrecognized Simplicities

“Most geniuses—especially those who lead others—prosper not by deconstructing intricate complexities but by exploiting unrecognized simplicities.” — Andy Benoit


How to Be Discovered

From Steve Cheney:

“The easiest way to be discovered right now in technology and perhaps many fields is to create your own independent blog and write. There is a huge dearth in availability of good, current, first party content today.

The single most important advice I can give to actually write is to write.

The thing that happens which you don’t see until you write is that your content engages some of the smartest people who are lurking around the internet. And they reach out to you.”


Generating Faces

Samsung researchers have released a model that can generate faces in new poses from just a single image/frame (for each of face, pose). Done by building a well-trained landmark model in advance & one-shotting from that.

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Wicked Learning Environments

Hilarious anecdote from David Epstein:

“The wider world is mostly characterized by wicked learning environments, where you can’t see information. It’s hidden from us. Feedback is delayed and sometimes inaccurate.

One of the examples is a famous New York City physician who was renowned for his ability to predict that patients would get typhoid. He predicted the sickness time and again. He would palpate their tounge (feel around their tongue) and predict, weeks before patients had a single symptom, over and over, and became famous, and as one of his colleagues said, he was a more productive carrier of typhoid than even Typhoid Mary because he was giving his patients Typhoid with his hands. In that case, the feedback he was receiving was reinforcing exactly the wrong lesson.

So that’s the extreme of a wicked environment where your feedback teaches exactly the wrong lesson.”


Raising People’s Ambitions

Love this paragraph from Tyler Cowen:

“At critical moments in time, you can raise the aspirations of other people significantly, especially when they are relatively young, simply by suggesting they do something better or more ambitious than what they might have in mind. It costs you relatively little to do this, but the benefit to them, and to the broader world, may be enormous. This is in fact one of the most valuable things you can do with your time and with your life.”


The Magic of Twitter

“Twitter is the most amazing networking and learning network ever built.

For someone whose pursuing their dream job, or chasing a group of mentors or peers, it’s remarkable. In any given field, 50-80% of the top experts in that field are on Twitter and they’re sharing ideas, and you can connect to them or follow them in your personal feed.

If you get lucky enough and say something they find interesting, they might follow you, and the reason this becomes super interesting is that unlocks direct message, and now all of a sudden you can communicate directly or electronically with that individual. Very, very powerful.

If you’re not using Twitter, you’re missing out.” — Bill Gurley


Gambling and Cowboy Boots

On September 24th, 1980, a man wearing cowboy boots and carrying two brown suitcases entered Binion’s Horseshoe Casino in Las Vegas. One suitcase held $777,000 in cash; the other was empty. After converting the money into chips, the man approached a craps table on the casino floor and put everything on the backline. This meant he was betting against the woman rolling the dice. If she lost, he’d double his money. If she won, he’d lose everything. Scarcely aware of the amount riding on her dice, the woman rolled three times: 6, 9, 7.

“Pay the backline,” said the dealer. And just like that, the man won over $1.5 million. He calmly filled the empty suitcase with his winnings, exited Binion’s into the desert afternoon, and drove off. It was the largest amount ever bet on a dice roll in America.


Self-Driving Cars

“Some scientists believe that driverless cars will not work unless they learn to be irrational.

If such cars stop reliably whenever a pedestrian appears in front of them, pedestrian crossings will be unnecessary and jaywalkers will be able to marching to the road, forcing a driverless car to stop suddenly, a great discomfort to its occupants. To prevent this, driverless cars may have to learn to be angry, and you occasionally maliciously fail to stop in time and strike the pedestrian on the shins.

If you are wholly predictable, people learn to hack you.”


The Rise of Dollar Stores

“Four new dollar stores will open in the U.S. every single day of 2019. That’s a new dollar store every six hours. There are more dollar stores than there are Walmarts, McDonald’s and CVS stores combined.”


Don’t Lie to Yourself

A powerful line from the “Elder” named Zosima in The Brothers Karamozov:

“Above all, don’t lie to yourself. The man who lies to himself and listens to his own lie comes to a point that he cannot distinguish the truth within him, or around him, and so loses all respect for himself and for others. And having no respect he ceases to love… “Above all, avoid falsehood, every kind of falsehood, especially to yourself.”


Tall Cars and Tophats

In 1940, cars had high roofs. But by 1960, they didn’t because men stopped wearing hats.

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The Booming Self-Storage Industry

The self storage industry is growing fast, and has grown into a $38 billion industry. Some statistics stand out from this recent article:

  1. “One in 11 Americans pays an average of $91.14 per month to use self-storage.”

  2. “According to SpareFoot, a company that tracks the self-storage industry, the United States boasts more than 50,000 facilities and roughly 2.311 billion square feet of rentable space.”

  3. The industry has grown by 7.7 percent per year since 2012.

  4. “Paying for storage space is like a gym membership; consumers join and forget about it. Even better for owners, they’re often willing to accept slight increases in cost, rather than deal with the hassle of moving their possessions across town to a competitor’s warehouse.”

  5. New York has roughly 50 million square feet of self-storage space. And yet, with 3.5 square feet of self storage per resident, it’s the most “underserved market” in America according to CBRE (the national average is 7.2 square feet per person).

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Kumi Yamashita

Japanese artist Kumi Yamashita winds a single black thread around a grid of nails on a wooden board to create intricate portraits.

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Ira Glass on Taste

Every creator needs to hear these words from Ira Glass:

“Nobody tells this to people who are beginners, I wish someone told me. All of us who do creative work, we get into it because we have good taste. But there is this gap. For the first couple years you make stuff, it’s just not that good. It’s trying to be good, it has potential, but it’s not. But your taste, the thing that got you into the game, is still killer. And your taste is why your work disappoints you.

A lot of people never get past this phase, they quit. Most people I know who do interesting, creative work went through years of this. We know our work doesn’t have this special thing that we want it to have. We all go through this. And if you are just starting out or you are still in this phase, you gotta know its normal and the most important thing you can do is do a lot of work.

Put yourself on a deadline so that every week you will finish one story. It is only by going through a volume of work that you will close that gap, and your work will be as good as your ambitions. And I took longer to figure out how to do this than anyone I’ve ever met. It’s gonna take awhile. It’s normal to take awhile. You’ve just gotta fight your way through.”


Evolutionary Reasons for Humor

From Bret Weinstein:

  1. “Laughter is the sound of comprehension.” — Tom Stoppard

  2. Humor is the mechanism where we sort out the grey area of what can and can’t be said.

  3. Humor treads at the frontier of consciousness. When a comic finds a funny joke, they are unearthing a truth that people are only kind of aware of, but the whole room grasps that everybody else is aware of the truth, and laughter ensues.



How Temperature Changes

A band of equal average annual temperature between Europe and North America. Demonstrates the importance of the gulf stream for keeping Europe quite a few degrees above its latitude would expect.

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On Friendship

Two wonderful quotes from John O’Donahue:

  1. “One of the tasks of true friendship is to listen compassionately and creatively to the hidden silences. Often secrets are not revealed in words, they lie concealed in the silence between words.”

  2. “When was the last time you had a great conversation? A conversation that wasn’t just two intersecting monologues, but when you overheard yourself saying things you never knew you knew, that you heard yourself receiving from somebody words that found places within you that you thought you had lost, and the sense of an “eventive” conversation that brought the two of you into a different plain and then forthly, a conversation that continued to sing afterwards for weeks in your mind? Conversations like that are food and drink for the soul.”


Frozen Lake Michigan

A passenger snapped this photo while flying into Chicago.

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Holy Moly Guacamole!

“Today, humanity fabricates 1,000 times more transistors annually than the entire world grows grains of wheat and rice combined. Collectively, all those transistors consume more electricity than the state of California.”


China’s Infrastructure

  1. Between 2011 and 2013, china used 50% more cement than the United States in the 20th century.

  2. Of the world’s 100 highest bridges, 81 are in China, including some unfinished ones.

  3. In 2016 alone, China added 26,100 bridges on roads, including 363 “extra large” ones with an average length of about a mile, government figures show.

  4. China opens around 50 high bridges each year. The entire rest of the world opens ten.

  5. China also has the world’s longest bridge, the 102-mile Danyang-Kunshan Grand Bridge, a high-speed rail viaduct running parallel to the Yangtze River, and is nearing completion of the world’s longest sea bridge, a 14-mile cable-stay bridge skimming across the Pearl River Delta, part of a 22-mile bridge and tunnel crossing that connects Hong Kong and Macau with mainland China.


Why Chips and Coca-Cola are Addicting

Here’s Warren Buffett: “Cola has no taste memory. You can drink one at 9am, 11am, 5pm. You can’t do that with cream soda, root beer, orange, grape. You get sick of them after a while. The average person drinks 64 ounces of liquid per day, and you can have all 64 ounces of that be Coke.”

Same with Doritos, Cheetos, most popular junk food. They are engineered to overcome “sensory-specific satiety” and to give a sense of “vanishing caloric density.”


Zen and the Art of Motorcycle Maintenance

I reviewed my notes from Robert Pirsig’s masterpiece, Zen and the Art of Motorcycle Maintenance to write about the Aesthetic Delta.

These quotes from the book stuck out:

  1. “To live only for some future goal is shallow. It’s the sides of the mountain which sustain life, not the top.”

  2. “If you become restless, speed up. If you become winded, slow down.”

  3. “An experiment is never a failure solely because it fails to achieve predicted results. An experiment is a failure only when it also fails adequately to test the hypothesis in question, when the data it produces don’t prove anything one way or another.”

  4. “You want to know how to paint a perfect painting? It’s easy. Make yourself perfect and then just paint naturally. That’s the way all the experts do it.”

  5. “The past exists only in our memories, the future only in our plans. The present is our only reality.”

  6. “When analytic thought, the knife, is applied to experience, something is always killed in the process.”

  7. “The place to improve the world is first in one’s own heart and head and hands, and then work outward from there.”


Famous People in History

Here’s how far away you are from famous people in history.

1 generation = 25 years

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Growth in American Highways

Some background on the U.S. highway system, all from this excellent paper:

  1. The bulk of the highway system routing was determined in the 1940s and early 1950s, pre-dating federal government funding.

  2. The Federal-Aid Highway Act of 1944 established the initial 40,000-mile National System of Interstate and Defense Highways spanning the United States.

  3. President Eisenhower envisioned the highways as a means to encourage economic development, speed traffic, and provide for the national defense.

  4. Though Interstate construction lasted for over 40 years, most miles were constructed in the 1960s and 1970s—54 and 31 percent respectively.

  5. By 1990, the federal government spent three times as much to build a highway mile as it did in the 1960s, increasing from roughly $8 million per mile to roughly $25 million per mile.

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Website Typos

Gail.com It gets 5,000 views a day and millions of emails because people mistype Gmail.com. The domain was purchased as a gift in 1996 for a man’s wife. They still own the domain which is now just a plain html page with a lot of questions answered about the site.


When People Work Together

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Well, that’s Interesting!

A 90s study showed that women preferred the scents of men whose immune systems were most different from their own immune-system genes. Evolutionarily this makes sense as, children should be healthier if their parents’ genes vary, protecting them from more pathogens.


How Work is Changing

In 1870, 46% of jobs were in agriculture, and 35% were in crafts or manufacturing, according to economist Robert Gordon.

Few professions relied on a worker’s brain. You didn’t think; you labored, without interruption, and your work was visible and tangible. Today, that’s flipped. Thirty-eight percent of jobs are now designated as “managers, officials, and professionals.” These are decision-making jobs. Another 41% are service jobs that often rely on your thoughts as much as your actions.



Luxuries Become Necessities

“One of history’s few iron laws is that luxuries tend to become necessities and to spawn new obligations. Once people get used to a certain luxury, they take it for granted. Then they begin to count on it. Finally they reach a point where they can’t live without it.”


The Continental Axis Hypothesis

One of the most striking hypotheses in Jared Diamond’s Guns, Germs, and Steel was that technology diffused more easily along lines of latitude than along lines of longitude because climate changed more rapidly along lines of longitude making it more difficult for both humans and technologies to adapt. Thus, a long East-West axis, such as that found in Eurasia, meant a bigger “market” for technology and thus greater development.

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Douglas Adams’ Rules of Technology

1. Anything that is in the world when you’re born is normal and ordinary and is just a natural part of the way the world works.

2. Anything that’s invented between when you’re fifteen and thirty-five is new and exciting and revolutionary and you can probably get a career in it.

3. Anything invented after you’re thirty-five is against the natural order of things.


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Thoughts on San Francisco

San Francisco is a city of contradictions. From a sociological perspective, you won’t find a more interesting city to study.

I grew up in San Francisco, but rarely spent time in the areas I visit when I return to the city. I grew up in neighborhoods like the Marina, the Presidio, the Richmond, and the Sunset, but when I visit San Francisco now, I spend most of my time in SOMA, the Mission, and the Financial District.

Here’s what stands out from my time in San Francisco:

The Coffee: San Francisco has the best coffee of anywhere I’ve traveled. Every high-end coffee shop seemingly competes to make the perfect cup, so the flavors are richer and more diverse than what I’ve had anywhere else. 

Public Transportation: I spoke with one friend who has never taken MUNI or BART (SF’s public transit systems) even though he’s lived in San Francisco for seven months. In New York, that would be unthinkable. Almost all my friends take the subway every week. As a result, New York has much more cross-pollination between neighborhoods. Almost everybody in New York can point out Hell’s Kitchen, Williamsburg, DUMBO, or Greenwich Village on a map. Beyond that, almost everybody who lives in Manhattan has been to all these neighborhoods. In contrast, people in San Francisco are more likely to skip public transit and Uber around the city. Subways and street cars are sparse, so most of the people I know in San Francisco stay in a select number of neighborhoods. Almost everybody I spoke with had never been to West Portal, the neighborhood my parents live in — right in the geographic center of the city. 

The Writing Scene: Samo Burja beautifully explained the differences between the New York literary scene and the San Francisco blogosphere. In New York, writers show off their expertise with references to famous artists and writers, sprinkled with a blend of verbose language to flaunt their education. The San Francisco writing scene prizes clarity and contrarian originality. The thirst for clarity is shaped by computer scientists who outline their work by writing documentation, and the drive for contrarian originality is driven by entrepreneurs and venture capitalists who arbitrage the difference between the state of the world as it exists today, and state of the world as it will be once their startup becomes successful. The method I teach in Write of Passage is shaped by the San Francisco style because that’s where the opportunity is. 

The Center of Gravity is Shifting North: Silicon Valley traditionally referred to the area between Palo Alto and San Jose. But in the past decade, the big companies have moved north to San Francisco. Startups don’t need as much space to launch a minimum viable product, and most don’t need as many employees to build a big company. 


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Philanthropy: All the technology IPOs have minted hundreds of millionaires. Some of that new wealth will go towards philanthropy. East Coast philanthropy goes towards classic institutions like museums, universities, public parks, and symphony halls. I suspect Silicon Valley philanthropy will look different. During my time in San Francisco, I attended a party for Palladium Magazine, which, to the best of my knowledge, is funded by Silicon Valley entrepreneurs. 

The Contrast: San Francisco has the prettiest natural surroundings of any city in America. The rolling hills provide glorious views of the water, the parks, and the buildings. But the beauty is juxtaposed with extremes of entrepreneurship and homelessness. The entrepreneurs are freakishly ambitious. They have bold visions for the future and an ecosystem of investors to finance their risky pursuits. The optimism is contrasted with the angriest homeless people of anywhere I know. During my trip, I saw one man smash and destroy a radio, another empty the contents of a garbage bin and throw it over the sidewalk, another smoking weed on the train, another get kicked out of the diner I was eating at, two people pissing on the streets, and two other men yell at me during conversations with friends. When I went downtown to write and workout on Thanksgiving Day, the streets felt like a scene from I Am Legend. My roommate described the streets of San Francisco as “opening the doors to a mental asylum.”

The Weather: Officially, San Francisco has a temperate climate. But in normal person terms, San Francisco is always “kinda cold.” It’s sweater weather 300 days per year. Or, as Mark Twain once said: “The coldest winter I ever spent was a summer in San Francisco.” It’s rarely hot enough to sit outside, and the city’s street life takes the brunt. Most restaurants don’t have outside seating because it’s rarely warm enough to sit outside, especially at night when the streets feel like a hollow, fog-filled wasteland. 

Rapid Mobility: Living in San Francisco is like an MBA for people in technology. People move there in their 20s to build their network and learn about the technology industry. Then they move away when they’re ready to have kids. Cities as a networking tool is fueled by the end of lifetime employment. Employees can’t expect lifetime employment anymore, so they build career stability through strong professional networks that stay with them even as they jump between jobs. Cities like San Francisco are the best place to build a network. Temporary residency brings side effects. The people who don’t expect to stay in San Francisco don’t seem politically engaged. I feel this intuitively from conversations with friends, but the data shows the opposite. According to the San Francisco Chronicle: “An eye-popping 74.4 percent of registered San Francisco voters cast a ballot in the midterm elections, the highest percentage for a midterm election here in modern history.” According to the city’s Department of Elections, voter turnout fell its low in 2013 and 2014, when only 29 percent of voters went to the polls. I’m not sure what accounts for the schism between the data and my intuition. I suspect San Francisco homeowners are more politically engaged than the renters or even homeowners who live in other cities. 

The Housing: San Francisco has deeply conservative tendencies for such a liberal city. Its housing supply isn’t growing fast enough to keep up with rising demand. The median price of a San Francisco home ($1.35 million) has doubled in the past decade, compared with just a 40 percent increase for the rest of America. Rising costs aren’t restricted to San Francisco. Between 1970 and 2010, real housing prices in California increased by 385 percent. As Kim-Mai Cutler wrote: “San Francisco had the highest median prices per square foot and had the lowest number of new construction permits per 1,000 units between 1990 and 2013.” I dove into the research and discovered that San Francisco has a long history of blocking big developments, such as the Freeway Revolt in the 1960s. Without the protests, the Bay Bridge would be connected to the Golden Gate Bridge via the Embarcadero Freeway, and other freeways would extend to the Richmond and Sunset neighborhoods. Say what you want about people who block new modern housing projects, but I believe San Francisco is a better city because these big developments have been blocked in the past. 


The Old Embarcadero Freeway

The Old Embarcadero Freeway


Before and after image of the Embarcadero after the freeway demolition

Before and after image of the Embarcadero after the freeway demolition

The Middle Class is Leaving San Francisco: Most new San Francisco housing is built for people with “above moderate” incomes. Where there are housing subsidies, they’re geared towards low-income residents. Thus, there’s hardly any new housing for people with moderate incomes, leading to the hallowing out of San Francisco’s middle class. Where below market homes are built, the competition is brutal. 2,800 people applied for 60 units at one affordable housing development in SOMA.


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The Two-Tiered School System: California’s K-12 schools are financed by property taxes. According to one essay, California’s spending per student fell from 5th in the nation in the 1960s to 50th — last in the nation — in this decade. In contrast, California spends more money per prisoner than any other state. At an annual rate of $65,000, each prisoner costs roughly the same amount as sending a student to Stanford for one year. San Francisco is known for its terrible public schools, so 30 percent of the city’s students attend private schools, many of which cost more than $30,000 per year. As a kid, I remember hearing that students couldn’t wear blue or red to public school because the gang violence was so bad.

Before we move on, you have to know about Proposition 13. Here’s a definition from a recent explainer: “Proposition 13, adopted by California voters in 1978, mandates a property tax rate of one percent, requires that properties be assessed at market value at the time of sale, and allows assessments to rise by no more than 2 percent per year until the next sale. This means that as long as property values increase by more than 2 percent per year, homeowners gain from remaining in the same house because their taxes are lower than they would be on a different house of the same value.”

The Missed Opportunity: Due to San Francisco’s restrictive housing policies, the number of people benefiting from the city’s growth isn’t nearly as high as it could be. Even though California residents earn 11 percent more than their national counterparts, mortgage payments 44 percent higher and rents are 37 percent higher than the national average. Because of Proposition 13, the average tenure length of a homeowner increased by three years in the Bay Area. San Francisco’s rental market is negatively impacted because the incentives of Proposition 13 decrease turnover for homeowners, and contribute to a lock-in effect which strengthens over time. According to UC Berkeley economist Enrico Moretti, new jobs benefit society because they bring spillover effects. Across the country, each new technology job produces roughly five additional local-services jobs. But because of San Francisco’s restrictionist housing policy, the spillover effects aren’t as large as they should be. Ted Egan, an economist for the city of San Francisco calculated that each new technology job produces only two extra jobs, not five. Restricted housing supply leads to increasing wages. But instead of distributing wealth across society, a disproportionate share of that increased purchasing power is going straight to homeowners. In another paper called Housing Constraints and Spacial Misallocation, Moretti found that the housing constraints in three cities (San Francisco, San Jose, and New York) have negative spillover effects for the entire country. Relaxing the housing constraints in these three high-productivity cities to the level of the median US city would “increase the growth rate of aggregate output by 36.3 percent. In this scenario, US GDP in 2009 would be 3.7 percent higher, which translates into an additional $3,685 in average annual earnings.” If true, better housing policy is a giant low-hanging fruit in America. It would raise incomes and increase welfare for all US workers.


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Over the next 15 years, I don’t think the prospects for San Francisco look good. I wouldn’t want to live there and it’s no longer necessary to start a tech company there. Real estate costs are too expensive for what you receive. For the vast majority of companies, it makes sense to staff people in lower-cost cities such as Provo, Boise, and Boulder. Fundraising is one of the biggest benefits of living in San Francisco. But people with strong networks and online audiences can build connections and fly to the Bay Area only when they need to. With that said, I write these words with only 60 percent certainty. Admittedly, I may be under-estimating San Francisco’s network effects and the tacit knowledge required to buy a venture-scale company. If you want to build a billion dollar business, there’s still no better place to be. 

Over the next 50 years, I have a positive outlook for the city. It’s destined to be a hot-bed for innovation and economic opportunity. Beyond that, the center of power in America continues to shift towards the San Francisco region. Bay Area built technologies are disrupting the East Coast: New York (finance), Washington D.C. (government), and Boston (academia). The Bay Area will benefit if it retains its network effect on tech-savvy talent.

Most of all, San Francisco will never lose its beauty. Since the Gold Rush, it’s attracted innovators, entrepreneurs, and marginalized groups, and I don’t expect that to change.


I publish a weekly newsletter called Monday Musings where I share ideas like this every week. You can subscribe here.

Algorithmic Blindspots

Algorithms distort the world.

They can trap us in local maxima, and restrict the kind of random serendipity that makes our personalities liquid.

On Tuesday, I had lunch with a friend who invests in artificial intelligence startups. To my surprise, he doesn’t use any algorithms in his personal life. No Spotify Discover Weekly. No Netflix suggestions. No Amazon recommendations.

I’m not ready to make the same commitment, but there’s a deep insight behind his rule for consumption: if you want to find emerging and under-rated ideas, stop using algorithms.

These ideas are hidden and obscure. They’re the opposite of viral. Instead of relying on algorithms to find them, identify your favorite people and follow the people who influenced them.

One good recommendation from somebody who knows you will help you more than hundreds of searches using the world’s best general-purpose algorithm. The more nuanced the subject, the more you should avoid algorithmic recommendations.

Amazon systematically under-recommends books with a high-variance in reviews. It tends to recommend books everybody likes, instead of ones that some people love and other people hate. That’s why I trust footnotes and personal recommendations more than Amazon reviews. For example, the genesis for my most popular essay ever came from Martin Gurri, the author of Revolt of the Public. While flipping through the hyperlinks, I found Andrey Miroshnichenko who wrote a fantastic little book called Human as Media, which I would have never found otherwise.

Likewise, my friend Nick finally ate at J.G. Melon last weekend. It’s my very favorite restaurant in New York. I’m convinced eating at a restaurant is more enjoyable when a friend recommends the place. I have no data to confirm this, but I suspect there’s a psychological reason for it. Maybe there’s more room for surprise or something like that.


My conversation with Nick. But seriously… how good does that burger look?

My conversation with Nick. But seriously… how good does that burger look?

My dad gave me lots of good advice, but among the best was his constant reminder to look at what everybody else is doing and do the opposite. His words have aged well, especially in the Internet age. By reinforcing our existing preferences, algorithms can narrow the variance in our consumption patterns.

Consider two areas: housing and online metrics.

  1. Housing: Don’t tell a realtor what features you want in your next home. Tell them what other people value, but you don’t care about. For example, when I was looking for an apartment, I didn’t value a garage or an outdoor space, and I was willing to live with roommates. Many apartments in my price range came with features I didn’t need, and since I didn’t value them, I found a brand new apartment in Williamsburg that feels underpriced to me. Beyond that, people always talk about easy-to-measure specs such as the number of bedrooms and bathrooms. Look for things that are hard to measure instead, such as natural light, storage efficiency, and a digitally connected door for Amazon packages. All things being equal, the market will undervalue these features. And finally, since most people in cities want their apartment to be close to a subway, look for a place that’s close to a convenient bus route. Doing so could save you hundreds of dollars per month and shorten your commute to work.

  2. Online Metrics: Internet metrics over-value quantity and under-value quality. It’s a measurement problem. For example, platforms can easily calculate how many people read my articles, but they can’t evaluate the quality of those people. This insight didn’t feel real until I attended Capital Camp, a conference hosted by two of the best people I know: Brent Beshore and Patrick O’Shaughnessy. I’d never seen anything like it. Nearly every person there was exceptional. There was more intellectual horsepower at the conference than any room I’ve ever been in. Since the conference, I’ve dropped the strategy of building the biggest possible online audience and tried to attract the most interesting and intelligent people I can instead. Sure, it’s hard to measure. But that’s exactly why this strategy repels competition. With that said, if you want to improve something, you have to measure it. In the words of Peter Drucker: “What gets measured, gets managed.” Inspired by Drucker’s wisdom, I measure the success of my essays by the number of interesting emails I receive after publishing them. If the emails aren’t interesting, I’m not attracting the right kinds of people. And if there aren’t enough emails, I’m not reaching enough people. Dropping the obsession with page views and building your own metric is a helpful way to differentiate yourself, find mispriced opportunities, and make algorithmic blind spots work in your favor.

Look for patterns in algorithmic recommendations, and avoid the standard recommendations. If you need to make up an algorithm, make up your own.

Doing so will save you money, keep you away from crowds, and improve the quality of what you consume.


This is an excerpt from a weekly newsletter I write called Monday Musings. You can subscribe here.

Why Did The Boeing 737 Max Crash?

When an airplane falls out of the sky, everybody stops. Families cry. Friends grieve. Journalists race to the scene. And all of us turn to the news. 

Airplane crashes capture an outsized share of attention. Even though they represent a small fraction of transportation-related crashes, their rarity and drama hold a steel grip on our hearts and minds. But what if we could understand the systemic issues that cause certain airplane crashes?

The airline industry has a strict process for evaluating accidents to prevent future ones. Immediately after a crash, a team of investigators observes the aircraft, studies the scene, and replays the pre-crash commentary from the cockpit. 

That’s exactly what happened with two recent Boeing 737 Max crashes, which led to the deaths of 346 total people. The first crash happened in October 2018 when Lion Air Flight 610 crashed 13 minutes after takeoff and killed all 189 people on board. Then, in March 2019, Ethiopian Airlines Flight 302 crashed and ended another 157 lives. Three days after the second crash, the United States government grounded all Boeing 737 Max airplanes. As I write this, the airplane is still barred from flying in every country.

The more I studied the crash, the more I realized the media wasn’t telling the full story. That’s the purpose of this essay. 

Why did the 737 Max crash? Because of a software failure. 

Why did the software fail? Because Boeing’s executive team has lowered its engineering standards. 

Why did Boeing lower its engineering standards? To lower costs and increase efficiency — the goal was to save money. 

Why does Boeing save money at the expense of human lives? Because Boeing purchased McDonnell-Douglas in 1997 and absorbed its ultra-corporate culture with relatively low engineering standards. Since the acquisition, the company hasn’t innovated as fast as it once did. In lieu of actual innovation, the company cut corners to maintain growth rates.

Why did Boeing buy McDonnell-Douglas? Because the airplane manufacturing industry is consolidating, and Boeing is pursuing profit at the expense of human lives. 

The actual story of the 737 Max crash begins with that McDonnell-Douglas purchase in 1997, 21 years before the first accident in late 2018. Unfortunately, media coverage of the crash mostly ignores Boeing’s corporate history. 

This is more than a story about two airplane crashes. It’s a story about an iconic American giant that lost its way because of mergers, risk-aversion, and excessive outsourcing.

Fasten your seat belts, put your seat in the upright position, and prepare for takeoff. 


Mergers

The airplane industry has been shaped by a series of recent mergers. By consolidating big airplane manufacturers into even bigger ones, those mergers have reduced industry competition. 

Duopolies slow innovation. Any economist will tell you competition is the spark that propels innovation. When there is no market competition, the rate of innovation declines. If you need further proof, look at the regulated utility companies that power the gas, energy, and internet for your home. And year after year, companies like Verizon and PG&E have the lowest customer satisfaction rates of any sector in the economy.


Mergers lead to a risk-averse culture

Industry concentration necessarily leads to a risk-averse culture. Companies don’t have to innovate when they know they won’t go out of business, because the incentives of the organization shift from driving the technology forward to not messing anything up. 

Until it acquired McDonnell Douglas in 1997, Boeing had a reputation for speed and innovation. For example, the 747 took its first flight just 930 days after Boeing decided to start the program.

In the case of Boeing, power has shifted from build-hungry engineers to blue-suit executives. As recently as 2000, one journalist wrote: “Boeing has always been less a business than an association of engineers devoted to building amazing flying machines.” 

Boeing’s culture has lost its progress-hungry mindset. Today’s executives don’t have Charles Lindbergh’s pioneering spirit or the Wright Brothers’ hacker mentality.

Boeing critics say the company adopted excessive outsourcing practices after the 1997 McDonnell Douglas merger. In the battle between finance and engineering, the money men walked away with the boxing belt. 

Boeing adopted McDonnell Douglas’ culture of risk aversion and cost-cutting. Instead of pursuing aggressive product development, Boeing ran the business for cash. By moving its headquarters from Seattle to Chicago, Boeing ensured the CEO would sit more than 2,000 miles away from the engineers who cut the wires and tightened the screws. To this day, industry insiders still joke, “McDonnell Douglas bought Boeing with Boeing’s money.”

In 2005, Boeing hired its first CEO without aircraft engineering experience. Slowly, the company lost its culture of engineering excellence and adopted one of financialization and cost reduction through outsourcing. To illustrate the dangers of outsourcing, Smith points to the DC-10 aircraft, where the subcontractors made all the profits while the McDonnell Douglas absorbed the excess costs. In the aircraft industry, outsourcing commercial aircraft is likely to backfire. Military aircraft are a major exception because Congressional support is easier to secure when many states are involved.¹ 

For all the chatter about the problems with industry concentration, nobody talks about the Boeing-Airbus duopoly.² If you’ve flown on a commercial jet with more than 150 seats, you can bet it was made by one of these two companies. They have near-equal share in the market for single-aisle jets, which Airbus values at $3.5 trillion over the next 20 years. 

Here, I want to draw a line between two parts of the airline industry: airlines and airplane manufacturers. 

From 2005 to 2017, the number of major airlines in America dropped from nine to four. And yet, during that time, inflation-adjusted prices fell and the total number of miles flown in the United States increased. Airline tickets for the five American major carriers — Delta, United, American, Alaska, and Southwest — began to be pushed downwards because of competition from a litany of low-cost carriers. Moreover, in individual city markets, airline concentration is not increasing. Competition among airlines is still relatively intense.

But in the market for purchasing airplanes, Boeing is the only major American manufacturer. Unlike the market for flights between Chicago and San Francisco, the market for airplanes is global. 

Even though Boeing and Airbus fight for market share, they don’t want the duopoly to end. Even when a market window opened after the Boeing 737 crashes, Airbus didn’t exploit it. As one Reuters article said, “Airbus is wary of exploiting Boeing’s misery… Airbus isn’t pouncing on Boeing’s 737 Max turmoil.” Pending any major safety issues, both businesses are safe from existential threats. Any big changes, such as a price war or a radical new jet, could destabilize the industry, but the shares of both aircraft manufacturers have skyrocketed over the past decade. 

Those mergers had a dangerous side effect: risk aversion.


Risk Aversion

In a culture of risk aversion, people hesitate to make necessary but impactful decisions which re-orient the company. To avoid blame, higher-ups and employees reject bold visions and adopt a status quo bias. 

In similar fashion, grant approvals for scientists have to pass through layers of approval. By the time they reach the end of the grant approval process, the ideas are watered down to the point of triviality. Paradoxically, the kinds of projects you can receive a grant for are probably too conventional. Transformative change is usually unpopular. But when you apply for a grant, the need to adapt to social conventions make it difficult to pursue paradigm-shifting work. Innovation slows and like the Boeing 737, necessary changes aren’t made. 


History of the Boeing 737

To understand why these airplanes crashed, we need to explore the history of the 737. 

The original 737 took its first flight in 1967, back when jet fuel was cheap. At the time, people didn’t understand the implications of pollution, so environmental concerns were an afterthought. Most airports were small and rural. They lacked infrastructure, such as jet gates and fancy luggage-loading machinery. In response, airlines asked manufacturers for low-to-the-ground airplanes with easy-to-reach engines, which reduced operating costs. And that’s exactly what Boeing gave the airlines.

The 737 Max’s structure resembles the original 737. The big difference is the engines are larger, the fuselage is bigger, and “winglets” were added to the tip of the wings to improve fuel efficiency.

By all accounts, the 737 fleet has been a smashing success. In 2005, more than 25% of all large commercial airliners were Boeing 737s. However, the recent crashes demonstrate the challenges of modernizing the Boeing 737 fleet. 

How did risk aversion cause the crashes?

The (very) basic background story goes like this: The Boeing 737 is a victim of its own success. The airplane thrived for more than half a century during a period when airplanes were safer and more automated. The 737 brand was so trusted that when aircraft upgrades were needed, Boeing re-designed the 737 instead of creating a new fleet of airplanes. 

As Stan Sorscher, a former Boeing engineer and a labor representative at the Society for Professional Engineering Employees, said: 

“The cost-cutting culture is the opposite of a culture built on productivity, innovation, safety or quality. Boeing’s experience with cost-cutting business culture is apparent.” He continues, “… Production problems with the 787, 747-8 and now the 737 Max have cost billions of dollars, put airline customers at risk, and tarnished decades of accumulated goodwill and brand loyalty.”

Sorscher tells a story about producing the Boeing 777 in the 1990s — before the McDonnell Douglas merger — when a Boeing executive was so close to the engineering process he left the plant with grease all over his thousand-dollar suit.  The decision to reduce costs and speed up 737 Max production led directly to the crashes. Re-designing an airplane from scratch would take too long, so Boeing built upon the 737’s old and outdated design instead. 

More seeds of the 737 Max crashes were sown in 2011 when American Airlines announced their plans to purchase 460 jets from Airbus. Boeing executives were shocked. American Airlines had been an exclusive Boeing customer for more than a decade. At the time of the decision, Boeing planned to build a new jet to replace the aging 737. But after the news, Boeing changed gears. Building a new airplane would cost too much money and take more than a decade to build. To win over American Airlines, Boeing scrapped the new airplane and made a plan to re-engineer the Boeing 737 instead. Thus, the Boeing 737 Max was born. 

The Boeing 737 Max had other advantages. Had Boeing released a new aircraft, pilots would have had to train for it by spending time in flight simulators, which would have cost more money. By limiting the changes to the 737, Boeing averted those requirements and saved on expensive pilot training. 

Speaking about the project, one Boeing engineer said: “Any designs we created could not drive any new training that required a simulator…That was a first… There was so much opportunity to make big jumps, but the training differences held us back.”

To compete with the Airbus A320-NEO, the Max had larger engines than previous 737 models. They were designed for greater range and fuel efficiency but came with a tradeoff. Since the 737 sits so low to the ground, Boeing had to change the position of the engines on the wing to give the plane ground clearance and account for the extended length of the fuselage. 

But by solving an old problem, Boeing created a new one. The new engines were too big to fit in their traditional spot under the wings. To combat the problem, Boeing mounted them forward on the wings. Moving the engine position forward shifted the plane’s center of gravity, which altered the aerodynamics of the aircraft. The position of the new engines pulled the 737 tail down, pushed its nose up, and put it at risk of stalling. (Slow air speed and high nose position are the most common causes of stalls. When an aircraft stalls, it begins to fall because the wings stop creating lift.)

Boeing installed extra software to make the updated 737 fly like traditional ones. It was designed to prevent stalls, compensate for the position of the engine on the wing, and force the aircraft’s nose down automatically when the sensors determined the airplane was flying at a dangerous angle. 

The stall-prevention system (known as MCAS) was poorly designed and implemented. Since it was intended to work in the background, Boeing didn’t brief pilots about the software or train them in simulators. The software didn’t activate when the flaps were down or the autopilot was on.³ And when the MCAS system went haywire, pilots could deactivate it with a switch on the center pedestal of the 737 cockpit. As pilots yoked the airplane upwards, the software automatically pushed the aircraft nose back down. This led to the crash of the two Boeing airplanes.


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Simple directions flowed from the executives to engineers: Reduce costs, finish the airplane fast, and don’t change the airplane too much.

To be clear, I’m arguing we should experiment with new aircraft designs. After all, safety isn’t the only way to improve aviation. Increasing speed and fuel efficiency will reduce costs, propel the economy, and reduce pollution. 

But once we commit, safety is the number one goal. Airplane crashes are deadly, and we should do everything we can to avoid them. Boeing should have rigorous safety standards, and pilots should follow protocol whenever possible. With that said, Boeing needs a separate division to experiment with radical ideas such as supersonic passenger airplanes and small jets that could land and take off in cities. 

Intra-city jets would reduce commute times and decrease urban congestion. They would propel the economy and boost personal satisfaction. According to one study, adding 20 minutes to your commute reduces job satisfaction as much as a 19-percent pay cut. Another one found that U.S. cities with non-stop flights to Silicon Valley benefit from increased venture capital investment. It found that “a new daily flight from Silicon Valley to an international city leads to $23 million of additional VC raised by startups in the region.” Beyond that, time with friends and family is limited more by travel times than distance. Making transportation faster and more convenient is a near-guaranteed way to improve quality of life. 

Instead of dreaming up new ideas, Boeing pours its resources into incremental designs. Boeing executives knew the Boeing 737 design wouldn’t work with the larger engines. But instead of swallowing some short-term risk for long-term gain and building a new airplane from scratch, Boeing did the “safe” thing and iterated upon the existing 737 line. 

Pushing the frontier of engineering is risky. Doing so will challenge long-held doctrines in the airline industry and inspire whispers from gossipers who doubt the project’s viability.

The airplane industry suffers from a lack of innovation. The basic design of airplanes hasn’t changed in more than 70 years. When innovation disappears, companies are incentivized to engage in exactly the kind of behavior that led to the 737 Max crash. As Sorscher wrote: 

“The last great innovation capable of driving major growth in aviation was the jet engine back in the 1950s, and every technological advance since has been incremental. And so the emphasis of the business is going to switch away from engineering and toward supply-chain management. Because every mature company has to isolate which parts of its business add value and delegate the more commodity-like things to the supply chain. The more you look to the market for pricing signals, the more the role of the engineer will shrink.”

Certainly, there is some path dependency. Engineers are familiar with the standard design and might not want to work on something new. With that said, I’m always surprised by the difference between “airplanes of the future” and the standard designs that actually come. Even the Boeing 787, which was hailed as a revolutionary new aircraft, doesn’t look different to a casual observer.

Instead of innovating on performance, Boeing innovated on process. Since former Boeing CEO James McNerney spoke against “moonshots” in aircraft development, Boeing’s new airplanes don’t fly any faster than their predecessors. The technical chops for supersonic travel didn’t come from Boeing. It was only made possible by a partnership between Britain and France which led to the creation of the Concorde. 

Airplanes reached peak speeds with the Concorde. At its peak altitude of more than 60,000 feet, passengers gazed at the tilt of the earth. Piercing through the thin air, the Concorde out-raced the spin of the earth. At about 1,300 miles per hour, the Concorde was a magnitude faster than the Titanic. What once took 137 hours by ship took 3.5 hours on the Concorde. In fact, the trip from New York to Paris was so fast that passengers barely had time to watch the movie Titanic.

Sadly, the Concorde stopped flying in 2003, which marked the end of a spectacular chapter in human history. The popular narrative blames the crash of Air France Flight 4590 for the end of the Concorde. 

But Eli Dourado, the former head of global policy at a supersonic aircraft company called Boom Aerospace cites another reason: The airplane wasn’t profitable. Maintaining a small fleet of 14 airplanes cost too much because airlines required spare parts and a team of specialized technicians to keep the plane in service. Even though we have the technology to travel at supersonic speeds, all commercial flights today move slower than the speed of sound. 

Instead of lobbying Congress to reduce restrictions on supersonic travel, airplane companies use political clout for zero-sum endeavors such as reducing competition from foreign airplane manufacturers. 

By dropping its engineering-led culture, Boeing compromised safety standards, leading Boeing’s former chief financial officer to say don’t “get overly focused on the box” in an interview with Bloomberg in 2000. By “the box,” she meant the airplane. To engineers, the box is everything. But it’s a means to an end for detached corporate executives.


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For a parallel, consider the rocket industry. Ten years ago, it suffered from the same industry concentration that plagues aviation. NASA wasn’t innovating like it used to, and many people doubted it was still possible. SpaceX changed that. By injecting rocketry with a spirit of innovation, the company ignited the space industry. Spurred by Elon Musk, investors are pouring billions of dollars into the space industry. Unfortunately, the major airplane manufacturers have no such visions. 

Maybe Boeing knows something I don’t. Perhaps we’re close to peak efficiency in aircraft design. If that’s the case, experimentation doesn’t make sense. But until I see some radical new experiments fail, I don’t buy the argument. Unfortunately, Boeing won’t take on a project unless it has a near-100% chance of success.


Outsourcing 

Even as a small kid, I loved big machines. In 2006, when I was in 6th grade, I conducted a research project on the Boeing 787. Sensing my commitment for the project, my father surprised me with a trip to Seattle to tour the Boeing factory. During our visit, we geeked out about the in-cabin lighting, the large windows, and the ultra-light composite fuselage. We learned the 787 would be built of carbon-fiber composites instead of aluminum, which would make the airplane significantly lighter than its predecessors. Instead of running on pneumatics, the 787’s braking, pressurization, and air-conditioning systems would run on lithium-ion batteries and use 20% less fuel than similar airplanes. 

According to my father, one Boeing employee at the factory told us he had reservations about the 787. Since so many parts would be built internationally, he anticipated problems with quality control. 

During our visit, Boeing employees told us the airplane would be completed within two years. Then, the delays came. Boeing famously outsourced many aspects of the airplane construction process. Instead of building the 787 in house, Boeing built the airplane in individual parts and delegated development to more than 50 partners. 

By outsourcing production, Boeing’s main factory would turn into an assembly plant where pre-made parts were bolted together. More than 30% of the 787 was foreign-made, compared with 5% of the 747. When you fly on a 787, you’re traveling in an aircraft that was less than 40% built by Boeing. 

Outsourcing so much of the 787’s manufacturing proved to be a mistake. Instead of lowering costs, it raised them. By the time the 787 took its first commercial flight in 2011, it was three years late and billions of dollars over budget.


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If mid-level employees can anticipate the dangers of outsourcing, why do companies do it? 

Companies outsource their operations to increase profitability. 

The benefits of outsourcing are best described by Stan Shih, the CEO of a Taiwanese hardware and electronics company called Acer. He coined a term called “the smiling curve” to illustrate why certain aspects of the product creation process are more profitable than others. In the case of information technology-related manufacturing, research, development, and marketing are the most profitable areas to specialize. Fabricating the units and linking critical components is a low-margin race to the bottom. Inspired by this theory, companies like Boeing aim to specialize in high-margin activities and outsource the rest. 


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When does outsourcing work? 

Outsourcing works for the electronics industry due to the low labor rate. That’s why iPhones are designed in California but made in China. Companies outsource to countries with cheap labor. Their business brings even more work, which leads to increasing hourly rates. Once the costs rise, electronic outsourcing moves to another cheap and undeveloped area, where the cycle starts over again. 

But aircraft manufacturing is different. What works in high-volume industries like consumer electronics may not work in low-volume ones like aviation. Aircraft manufacturing programs are designed on a 60-year time frame — three decades for active production, followed by three more decades of support costs for hardware and software costs. Beyond that, an aircraft wing costs just a tad more to transport than a stone-weight iPhone. 

In contrast, the 787 parts didn’t seem to fit together. The wing didn’t securely attach to the body of the airplane, and there was a large gap between the flight deck and the fuselage. Boeing’s workers wanted the airplane to “snap together.” But different parts of the aircraft, from the wings to the smoke detectors, didn’t fit. Boeing paid the price: 

“In the end, much of the plane’s real design happened on the assembly line, and Boeing had to write off three separate mock-ups that were too much like science projects to pass off as airworthy planes. In the end, the Dreamliner (another name for the 787) cost no less than $30 billion, and probably closer to $50 billion.”

When it comes to outsourcing, aircraft engines are the exception that proves the rule. Jet engines are built by separate manufacturers due to economies of scale for manufacturers and technical expertise that does not translate to the rest of the aircraft, making it exactly the kind of product a company should outsource.

As the famous saying goes: “In theory, there’s no difference between theory and practice. In practice, there is.”

One Boeing engineer named L. J. Hart-Smith warned against the dangers of outsourcing in a leaked memo published in 2001. In the memo, Smith argues outsourcing should be seen as an added cost, not a cost reduction. He observed power within Boeing had shifted from ambitious scientists to slick lawyers and financiers.

Subcontractors, not Boeing, would benefit from increased outsourcing. In the case of Boeing, outsourcing threatens the survival of the company because too much outsourcing causes the profits to disappear along with the work itself. Without lots of up-front planning, the subassemblies may not fit together at assembly, which will lead to delays and increased costs. 

Outsourcing is a symptom of a larger move towards cost-cutting. Like many large bureaucracies, the aircraft industry is siloed by department. Instead of taking a comprehensive look at the system, managers analyze the business under a microscope. Each slice of the organization is responsible for minimizing their own costs instead of reducing costs for the organization at-large. 

Systems, though, are interconnected. An improved engineering process can reduce the cost of designing or manufacturing a product. Rather than minimizing costs in isolation, Smith advised Boeing to take a bird’s-eye view of the manufacturing process. After all, one system-wide cost reduction is worth more than 20 small and isolated efficiency gains.

I fear Boeing executives were overly concerned with following standard management doctrine. Just as “nobody got fired for buying IBM,” nobody got fired for outsourcing to a cheaper manufacturer. The modern economy is globalizing, and the workers within it are increasingly specialized. But Boeing took outsourcing and cost reduction too far, and the company suffered the consequences.

In the advertising industry, companies hire third-party advertisers to do the dark and dirty work of sketchy data practices. Then, when the company is blamed for malpractice, they can point their blame at that third-party firm. I wonder if outsourcing is driven by similar motivations. To be clear, I’m not accusing Boeing of intentionally ignoring safety. But by outsourcing manufacturing to third-parties, Boeing can shift the blame to partners with lucrative outsourcing contracts and little incentive to stand up for themselves. 

Boeing’s troubles were evident before the 737 Max crash. The Boeing 787 project went over budget by $12-18 billion, with delays and unexpected costs as the culprits. Executives couldn’t keep up with the 787’s complex manufacturing process. The aircraft contained 2.3 million parts built in 5,400 factories. Parts from those far-flung suppliers didn’t fit. Entire manufacturing lines were delayed when some subcontractors missed their quotas. Some subcontractors outsourced engineering to other subcontractors, which reduced Boeing’s visibility in the project. According to one analysis, one major supplier didn’t even have an engineering department when it won the Boeing contract. 

Due to battery fires in two planes, regulators had to ground 50 787s after the aircraft started flying. Because of these delays, I didn’t fly in a 787 until 2018, twelve years after I visited the Boeing factory.


Boeing’s Wake-Up Call

The 737 crashes were a wake-up call for Boeing. In the name of safety, the company shouldn’t let this crisis go to waste. The only thing worse than not learning from history is learning the wrong lessons from history. I worry that Boeing will respond in ways that prevent innovation and hurt the company’s long-term prospects. 

To its credit, the company says safety is its number one priority. My worry is the handover from this public relations crisis will prevent the company from taking the right kinds of risks. Instead of pushing the limits of speed, the company will implement the very kinds of outsourcing practices that caused this fiasco in the first place. Ultimately, the company is moving away from its engineering-led roots. 

As Matt Stoller wrote:

“The net effect of the merger, and the follow-on managerial and financial choices, is that America significantly damaged its aerospace industry. Where there were two competitors — McDonnell Douglas and Boeing, now there is one. And that domestic monopoly can no longer develop good civilian aerospace products. Hundreds of people are dead, and tens of billions of dollars wasted.”

In the shadow of the 737 crashes, I worry Boeing is giving more responsibility to its corporate overlords. Meaningful changes won’t be made unless Boeing analyzes its crashes in the shadows of the McDonnell Douglas merger and the 2001 Smith memo which anticipated the 787 battery fires. But the company shouldn’t stop there. It should drop its culture of mergers, risk-aversion, and excessive outsourcing. 

By simplifying the manufacturing process, Boeing would increase safety and reliability. The company can’t move quickly or pursue bold projects unless critical components are made in-house. Then, it should shift power back towards engineers with grand and optimistic visions for the future of flight. Otherwise, Boeing will not be able to recruit the most talented aerospace engineers. If Boeing wants to repair its image, it needs to become a beacon of American progress. 

Right now, Boeing is eating itself alive. Unless the company makes meaningful changes to its toxic culture, it will hamper innovation and jeopardize the lives of airplane passengers. 


Footnotes

¹ As a careful reader observed, “it’s disingenuous to complain about the domestic monopoly due to the global nature of aircraft purchases. It’s the equivalent of saying that Apple has a monopoly on smartphones because Samsung is based in South Korea.” With that said, Stoller’s statement could be valid for military spending because the US military buys from Boeing, not Airbus.

² There are two duopolies in the aircraft industry: one in the market for large jets, and another in the market for small jets. Embraer and Bombardier make the smaller jets.

³ I enjoyed this description of the MCAS system from William Langewiesche: The MCAS system “provided repetitive, 10-second bursts of nose-down trim, that it could be held at bay through vigorous use of the control yoke thumb switches to counter-trim, that it would not activate if the flaps were down or the autopilot was on, that it could be deactivated by shutting off the electric trim through use of the now-famous cutout switches on the center pedestal and that afterward the airplane could be trimmed using the manual trim wheel.”

Acknowledgments

Special thanks for Clearing Fog, Jessy Lin, Alex Danco, Eli Dourado, Eric Mogil, Bill Wynne, Laura Zielinski, Priyanka Pandit, and Nick Smith for comments, inspiration, and feedback.