The Cutting Room Floor

This page contains ideas, quotes, concepts, and more that didn’t quite make the cut, so have ended up on the “cutting room floor.” However, they stayed with us for one reason or another so have kept them in here as a bonus reference for our partners.

• Worldly Wisdom
  • Systems thinking is like analyzing a company. To deeply understand a company, you must know the important levers that impact its future prospects. This process helps you build a “hologram” of the company and understand how changes in interest rates, competition, growth rates, price changes, tariffs, and more might impact the company (Hologram in the Head). This is a holistic, dynamic, non-linear synthesis rather than a static analysis.
• First Principles
  • James Hill, a mostly unknown name today, was one of the shrewdest railroad operators in the 19^th century. He built up the Great Northern Railway which became one of the dominant railway companies in America. Hill took a long-term, methodical, robust approach to building railways. He had an engineer’s eye for reducing curvature and grades, knowing that this was the key to lower rates, reliability, and quality which would protect and distance him from any competition. Hill, like many other successful business magnates, made the most of downturns. While Hill eschewed federal cash subsidies per mile of track laid, under special circumstances he happily accepted land grants. Taking advantage of The Panic of 1873, he acquired the bankrupt St. Paul and Pacific Line, receiving 2.4 million upper mid-west acres. To make the most of such massive, but almost worthless, acreage, Hill:
    • “…dispatched a “special emigration agent” in 1887 to Norway and Sweden, where land shortages and inheritance laws favoring the eldest son motivated rising numbers of younger sons and daughters to leave. They, along with numerous Germans and Anglo-Irish responded by the tens of thousands. Long after his death, they would remember “Yim” or “Yem” Hill, fondly or less fondly, as the man who had recruited and located them. As Hill put it, “We are always anxious to help the people and get them into the country so as to build it up, to do anything we can to help them, even if it costs more than we get for it.” – James J. Hill, Empire Builder
  • Second-Order Thinking
    • Studies performed by Dutch psychologist Adriaan de Groot have shown that elite players don’t in fact look ahead that much further than considerably weaker players while solving chess problems. They can, on occasion, but it doesn’t define their superior play. A computer may look at millions of moves per second but lacks a deep sense of why one move is better than another; this capacity for evaluation is where computers falter and humans excel. It doesn’t matter how far ahead you see if you don’t understand what you are looking at. We have seen that precise calculation is the first key to effective decision-making. The second is the ability to evaluate both static (permanent) and fluid factors. When I contemplate my move, I don’t start out by immediately running down the decision tree for every possible move. First I consider all of the elements in the position – such as material and king safety – so I can establish a strategy and develop intermediate objectives. Only when I have these goals in mind do I select the moves to analyze…In a complicated game this tree of analysis usually stays within a depth of four or five moves—that is, four or five moves for each player, or eight to ten total moves. The decision tree must constantly be pruned. Move from one variation to the next, discarding the less promising moves and following up the better ones. Don’t jump to another before you’ve reached a conclusion on the move you’re analyzing; you’ll waste precious time and risk confusing yourself. You must also have a sense of when to stop. Discipline yourself to keep calculating until you have determined a path that is clearly the best, or until further analysis won’t return enough value for the time spent. In some cases, the best move will be so obvious that it’s not necessary to work out all the details, especially if time is of the essence. This is rare, however, and it is often when we assume something is obvious and react hastily that we make a mistake. More often you should break routine by doing more analysis, not less. These are the moments when your instincts tell you that something is lurking below the surface, or that you’ve reached a critical juncture and a deeper look is required. To detect these key moments, you must be sensitive to trends and patterns in your analysis. If one of the branches in your analysis starts to show surprising results, good or bad, it’s worth investing the time to find out what’s going on. Sometimes it’s hard to explain exactly what makes those bells go off in your head telling you there is more to be found. The important thing is to listen to them when they ring. One of my best games came about thanks to this sixth sense. I saw the final winning position, an incredible fifteen moves away. It was a feat of calculation, but there is no way your mind can go that far without help from your imagination. – Gary Kasparov, How Life Imitates Chess 
  • Ignorance Paradox
    • Keep WeWork example?
    • As a negative example, WeWork seems to have gotten stuck in the troughs of The Ignorance Paradox.  From the WeWork S-1:
      • We strive to operate our business so that each new location is accretive to our long-term financial performance. After an initial investment, each additional location not only adds members to our platform and revenue to our income statement, but also becomes profitable once it reaches a break-even point. As we move through the different lifecycle phases of each location, the cash flows shift from outgoing during the find and build phases, during which we invest to scale our location portfolio, to incoming during the fill and run phases, during which we seek to monetize our platform.
      • As we build and open more locations within existing markets, expand to new markets and scale our suite of products and services, we increase the value of our platform to our members and create additional capacity for incremental monetization of our platform. And as of today, we estimate that our market penetration in our 280 target cities globally is approximately 0.2%. We intend to continue deploying capital to grow and rapidly open new locations, relying on the experience, expertise, brand and scale that we have developed to date. We will leverage our leadership position to capture the global opportunity by growing in existing and new markets and expanding the scope of our solutions and the products and services we offer our members.
      • AWS – Interesting example of reciprocation as it relates to AWS: Amazon uses the data it collects from the sales on its platform and has been known to copycat some top performing products. This, rightfully so, scares many businesses because they don’t feel that the products which serve as their lifeblood are safe. This has caused certain customers to opt for Microsoft’s Azure, knowing that Microsoft has committed to not competing with their customers. Worth including?
  • Physics     
    • Newton’s Law of Gravity
    • Maxwell’s Equations
    • The Quantum Theory
    • The Schrodinger Equation
    • The Standard Model
    • Vortex      
    • Fields
    • The 4 Fundamental Forces of Nature
    • Uncertainty principle
    • Waves
    • Pressure
    • Example
  • Some very rare materials (and people!) show a much-desired trait of “inverse compressive strength.” These materials, incredibly, get stronger, the more pressure that is applied. More pressure creates more strength. For example, a diamond is created out of a very common and simple element, carbon fiber, after being exposed to huge amounts of pressure for eons.
  • Certain companies and systems can also get stronger when exposed to pressure, and can be thought of as “antifragile.” Rather than weakening in these tough times, they get stronger.
  • Resonance
    • Example
    • Each object has a different frequency at which it naturally oscillates and when you play that frequency, the energy of the wave causes the glass to vibrate more and more until it breaks
    • Teams and products/services can also achieve resonance and, when they do, they take off. That is when you can begin seeing exponential results
    • The object-relational impedance mismatch is a set of conceptual and technical difficulties that are often encountered when a relational database management system (RDBMS) is being served by an application program (or multiple application programs) written in an object-oriented programming language or style, particularly because objects or class definitions must be mapped to database tables defined by a relational schema. The term object-relational impedance mismatch is derived from the electrical engineering term impedance matching. – Wikipedia
    • Technical Description
    • Resonance is the reinforcement or prolongation of sound by reflection from a surface or by the synchronous vibration of a neighboring object. – Wikipedia
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  • Chemistry
    • Electrons & Atoms
    • Stoichiometry
    • Lewis Structure
    • Acids & Bases
    • Kinetic Theory – Particles in matter are in constant motion. The ways in which these motions vary with changes in temperature and pressure determine whether a substance will be solid, liquid or gas
  • Mathematics
    • Function
    • Number Theory
    • Algebra
    • Calculus
    • Geometry & Topology
    • Logic
    • Dynamical systems
    • Combinatorics
    • fractals
  • Engineering
    • Percolation Threshold – Flow of fluids through porous materials; lattice models of random systems and the nature of connectivity in them
  • Biology
    • Swarm Intelligence
      • Example
      • Predator/prey dynamics sometimes end up with the prey on top by concentrating their energy and numbers. Ants beat mantises by swarming it faster than it can eat them
      • The equivalent of swarming for people is concentrating energy, thoughts and capital. This allows the small and weak to potentially vanquish the big and strong
      • Humans are the most powerful predators on Earth, but we are often brought down by “swarming” multitudes of simple everyday life circumstances if we don’t quickly grasp and dispense with them
    • Energy minimizing machines
      • In a physical world governed by thermodynamics and competition for limited energy and resources, any biological organism that was wasteful with energy would be at a severe disadvantage for survival. Thus, we see in most instances that behavior is governed by a tendency to minimize energy usage when at all possible. (taken from Farnam)
      • Path of least resistance / thinking
      • All sorts of biases, blind spots, heuristics because they are easier. May not be more accurate, but they are easier
      • Tendency to Stereotype – The tendency to broadly generalize and categorize rather than look for specific nuance. Like availability, this is generally a necessary trait for energy-saving in the brain. (taken from Farnam)
    • Dialectical Materialism
      • Clark, Civilisation
      • White, Medieval Technology and Social Change
      • McEvedy, Penguin Atlases of Ancient and Medieval History
      • Laslett, The World We Have Lost
      • Bernal, The Extension of Man
      • Girouard, Life in the English Country House
      • Pirenne, Mohammed and Charlemagne
      • Runciman, The Fall of Constantinople
      • Cipolla, Guns, Sails and Empires
      • Hadas, A History of Rome
      • Oman, The Art of War in the Middle Ages
      • Bovill, The Golden Trade of the Moors
      • Caesar, Gallic Wars
      • Kuhn, The Copernican Revolution
      • Kenneth Galbraith
  • Psychology
    • Aristotle’s Maxim
      • We are what we repeatedly do. Excellence, therefore, is not an act, but a habit
  • Philosophy
    • Find the Good in a Thing at Once
    • Politics
      • Democracy is a device that ensures we shall be governed no better than we deserve.
      • – George Bernard Shaw
      • You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot further the brotherhood of man by encouraging class hatred. You cannot help the poor by destroying the rich. You cannot keep out of trouble by spending more than you earn. You cannot build character and courage by taking away man’s initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.
      • – Abraham Lincoln
      • It is not the function of our government to keep the citizen from falling into error; it is the function of the citizen to keep the government from falling into error.
      • – Justice Robert H. Jackson – America Communicators Association vs. Douds
      • Politics is about human beings and their lives. It is an art, not a science. It is the art of the possible. In Singapore, it means what is possible, given a hard-working people, with a realistic understanding of our narrow economic base and the need for social discipline and high performance, to keep ahead of other developing countries with low wages and more natural resources.
      • – Lee Kuan Yew, The Wit and Wisdom of Lee Kuan Yew
  • Persuasion
  • Family
    • How to choose a partner
      • Versatility
      • Do you like having dinner with them
      • Deserve the partner you want.
  • Business
    • Winner’s Curse
      • Highest bidders win but typically pay too much so lose. Competition and ambiguity of true value of things cause this
      • Buffett’s rules for auctions: don’t go.
    • Shorting
    • Thompson’s Aggregation Theory
    • Efficient-Market Hypothesis
      • Asset prices fully reflect all available information. Investors, including the likes of Warren Buffett, and researchers have disputed the efficient-market hypothesis both empirically and theoretically
      • This hypothesis implies a spectrum. Some people are of the school of thought that the market is partially efficient, mostly efficient, etc..
      • Irrational Exuberance, Howard Marks
        • In response, I want to give my view of market efficiency. I want to say up front that academics don’t share my view and theory says I’m wrong. But my approach works for me, and I want to share it with you. In my opinion, the market for many stocks is highly efficient. That’s what I was taught at the University of Chicago in the mid-’60s, when capital market theory was being developed. And in 1978, when I left equity research, I told Citibank I’d do anything but “spend the rest of my life choosing between Merck and Lilly.” I believed in market efficiency then and I believe in it now. But what does that mean? When I say efficient, I mean “speedy,” not “right.” My formulation is that analysts and investors work hard to evaluate all of the available information such that:
          • the price of a stock immediately incorporates that information and reflects the consensus view of its significance, and
          • thus, it is unlikely that anyone can regularly outguess the consensus and predict a stock’s movement.
        • That is, the market may often misvalue stocks, but it’s not easy for anyone person – working with the same information as everyone else and subject to the same psychological influences – to consistently know when and in which direction. That’s what makes the mainstream stock market awfully hard to beat – even if it isn’t always right.
  • Technology
    • AI
      • One can claim the checker playing program “learned” and the geometry theorem proving program showed “creativity”, “originality”, or whatever you care to call it. They are but a pair of examples of many similar programs which have been written. The difficulty in convincing you the programs have the claimed properties is simply once a program exists to do something you immediately regard what is done as involving nothing other than a rote routine, even when random numbers obtained from the real world are included in the program. Thus, we have the paradox; the existence of the program automatically turns you against believing it is other than a rote process. With this attitude, of course, the machine can never demonstrate it is more than a “machine” in the classical sense, there is no way it can demonstrate, for example, it can “think”. – Richard Hamming
    • A/B Testing
      • A/B testing is a randomized experiment with two variants, A and B. It includes application of statistical hypothesis testing or “two-sample hypothesis testing” as used in the field of statistics. Large tech companies today can run millions of iterations to see which results in the most clicks, views, time on page, or whatever they are optimizing for. Comparing two versions to different consumers to see what works best, whether it is page flow, wording, imagery, colors, etc.
  • Economics
    • Free Market Economy
    • Market Forces
    • Inflation
      • A sustained increase in the supply of money, without an increase in the supply of goods, causes prices of goods and services to rise over a period of time. Unpredictable inflation makes it harder for people to figure out the real values of goods, services, and investments. Excessive inflation can lead to economic disruption.
      • Real vs nominal value – real value is relative to other commodities or goods and is adjusted for inflation; nominal is not adjusted for inflation
      • Hyperinflation – extreme inflation
      • Deflation – decrease in general price level of goods and inflation
      • Debasement – lowering the value of currency
  • Government and politics
  • Military/war
    • Containment
    • Appeasement
    • Empty Fort Strategy – Involves using reverse psychology (and luck) to deceive the enemy into thinking that an empty location is full of traps and ambushes, and therefore induce the enemy to retreat.
    • Trojan Horse – Hiding something harmful disguised as a gift or something helpful in order to gain entrance and then destroy. “After a fruitless 10-year siege, the Greeks constructed a huge wooden horse, and hid a select force of men inside. The Greeks pretended to sail away, and the Trojans pulled the horse into their city as a victory trophy. That night the Greek force crept out of the horse and opened the gates for the rest of the Greek army, which had sailed back under cover of night. The Greeks entered and destroyed.”
    • The Flypaper Theory – The idea that it is desirable to draw enemies to a single area, where it is easier to kill them, and they are far from one’s own vulnerabilities.
    • Rumsfeld’s rule / joy’s law
    • Beachhead – A temporary line created when a military unit reaches a landing beach by sea and begins to defend the area while other reinforcements help out until a unit large enough to begin advancing has arrived.
    • Take small bites / The fait accompli strategy – over power grabs and sharp rises to the top are dangerous, creating envy, distrust, and suspicion. Often the best solution is to take small bites, swallow little territories, playing upon people’s relatively short attention spans. Before people realize it, you have accumulated an empire
    • Declare war on your enemies: the polarity strategy – Life is endless battle and conflict, and you cannot fight effectively unless you can identify your enemies. Learn to smoke out your enemies, to spot them by the signs and patterns that reveal hostility. Then, once you have them in your sights, inwardly declare war. Your enemies can fill you with purpose and direction.
    • Amidst the turmoil of events, do not lose your presence of mind: the counterbalance strategy – In the heat of battle, the mind tends to lose its balance. It is vital to keep you presence of mind, maintaining your mental powers, whatever the circumstances. Make the mind tougher by exposing it to adversity. Learn to detach yourself form the chaos of the battlefield
    • In military terms, this can be though to losing the battle but winning the war. A poor strategy that wins a lesser (or sub-) objective but overlooks and loses the true intended objective. Sacrifice play – sacrificing one part of a unit or a certain battle for the good of the war. Pyrrhic victory – victory which inflicts such devastating toll on the victor that it is tantamount to defeat
    • Know your enemy: the intelligence strategy – the target of your strategies should be less the army you face than the mind of the man or woman who runs it. If you understand how that mind works, you have the key to deceiving and controlling it. Train yourself to read people, picking up the signals they unconsciously send about their innermost thoughts and intentions
    • Control the dynamic: forcing strategies – People are constantly struggling to control you. The only way to get the upper hand is to make your play for control more intelligent and insidious. Instead of trying to dominate the other side’s move, work to define the nature of the relationship itself. Maneuver to control your opponent’s minds, pushing their emotional buttons and compelling them to make mistakes.
    • Dynamic strategies – keep your enemies on their heels; shift the battlefield; compel mistakes; assume passive control
    • Defeat them in detail: the divide and conquer strategy – never be intimidated by your enemy’s appearance. Instead, look at the parts that make up the whole. By separating the parts, sowing division, you can bring down even the most formidable foe. When you are facing troubles or enemies, turn a large problem into small, eminently defeatable parts.
    • Recursively breaking down a problem into two or more sub-problems of the same or type, until these become simple enough to be solved directly. The solutions to the sub-problems are then combined to give a solution to the original problem.
    • Envelop the enemy: the annihilation strategy – people will use any kind of gap in your defense to attack you. So, offer no gaps. The secret is to envelop your opponents – create relentless pressure on them from all sides and close off their access to the outside world. As you sense their weakening resolve, crush their willpower by tightening the noose
    • Negotiate while advancing: the diplomatic war strategy – Before and during negotiations, you must keep advancing, creating relentless pressure and compelling the other side to settle on your terms. The more you take, the more you can give back in meaningless concessions. Create a reputation for being tough and uncompromising, so that people are back on their heels before they even meet you
    • Occupy the moral high ground: the righteous strategy – In a political world, the cause you are fighting for must seem more just than the enemy’s. By questioning your opponent’s motives and making them appear evil, you can narrow their base of support and room to maneuver. When you yourself come under moral attack from a clever enemy, do not whine or get angry; fight fire with fire
    • Deny them targets: the strategy of the void – the feeling of emptiness or void – silence, isolation, non-engagement with others – is for most people intolerable. Give your enemies no target to attack, be dangerous but elusive, and then watch as they chase you into the void. Instead of frontal battles, deliver irritating but damaging die attacks and pinprick bites
    • Seem to work for the interests of others while furthering your own: the alliance strategy – The best way to advance your cause with the minimum of effort and bloodshed is to create a constantly shifting network of alliances, getting others to compensate for your deficiencies, do your dirty work, and fight your wars. At the same time, you must work to sow dissension in the alliances of others, weakening your enemies by isolating them.
    • Give your rivals enough rope to hang themselves: the one-upmanship strategy – life’s greatest dangers often come not from external enemies but from our supposed colleagues and friends who pretend to work for the common cause while scheming to sabotage us. Work to instill doubts and insecurities in such rivals, getting them to think too much and act defensively. Make them hang themselves through their own self-destructive tendencies, leaving you blameless and clean
    • Penetrate their minds: communication strategies – communication is a kind of war, its field of battle the resistant and defensive minds of the people you want to influence. The goal is to penetrate their defenses and occupy their minds. Learn to infiltrate your ideas behind enemy lines, sending messages through little details, luring people into coming to the conclusions you desire and into thinking they’ve gotten there by themselves.
    • Destroy from within: the inner-front strategy – by infiltrating your opponents’ ranks, working from within to bring them down, you give them nothing to see or react against – the ultimate advantage. To take something you want, do not fight those who have it, but rather join them – then either slowly make it your own or wait for the moment to stage a coup d’état
    • Sow uncertainty and panic through acts of terror: the chain reaction strategy – Terror is the ultimate way to paralyze a people’s will to resist and destroy their ability to plan a strategic response. The goal in a terror campaign is not battlefield victory but causing maximum chaos and provoking the other side into desperate overreaction. To plot the most effective counter-strategy, victims of terror must stay balanced. One’s rationality is the last line of defense.
    • Though asymmetric insurgent warfare can be extremely effective, over time competitors have also developed counterinsurgency strategies. Recently and famously, General David Petraeus of the United States led the development of counterinsurgency plans that involved no additional force but substantial additional gains. Tit-for-tat warfare or competition will often lead to a feedback loop that demands insurgency and counterinsurgency.
  • Law
    • Law – burden of proof, reasonable doubt, contract, guarantee, due process, duty of care, good faith, negligence, intellectual property
    • The term “burden of proof” is used to mean two kinds of burdens: The burden of production (or the burden of “going forward with the evidence”) and the burden of persuasion.
    • A “burden of persuasion” or “risk of nonpersuasion” is an obligation that remains on a single party for the duration of the court proceeding. Once the burden has been entirely discharged to the satisfaction of the trier of fact, the party carrying the burden will succeed in its claim. For example, the presumption of innocence in a criminal case places a legal burden upon the prosecution to prove all elements of the offense (generally beyond a reasonable doubt), and to disprove all the defenses except for affirmative defenses in which the proof of non-existence of all affirmative defense(s) is not constitutionally required of the prosecution.
    • The burden of persuasion should not be confused with the evidential burden, or burden of production, or duty of producing (or going forward with evidence) which is an obligation that may shift between parties over the course of the hearing or trial. The evidential burden is the burden to adduce sufficient evidence to properly raise an issue at court. – Wikipedia
    • Burden of Proof – Must provide enough evidence to shift views from innocent to guilty, it is a presumption of innocence
    • One of the prime catalysts for industrialization was the spread of the rule of law. A necessary, if not sufficient, condition was that people who made fortunes be able to enjoy them in peace…Don’t let a ruling class of warriors and politicians squash the entrepreneurs. The same recipe that makes individuals rich makes countries powerful. Let the nerds keep their lunch money and you rule the world. – Paul Graham,
  • Accounting
    • Going concern
    • Double entry bookkeeping
    • Another thing which is obvious but seems necessary to mention; the popularity of a form of measurement has little relationship to its accuracy or relevance to the organization. – Richard Hamming
  • Design
    • Negative Space & Padding
    • Repetition
    • Contrast (Color, Shapes, and Texture)
    • Typography
    • Light
    • Design Patterns
    • Composition (Rule of Thirds)
    • Alignment & Proximity

• History of science – Kuhn is the guy on it
  • Emperor of all maladies
• Medicine
• History
  • Pendulum of history
• Foreign affairs
• Getting recommendations from the specialists
• Send steve blass – history, economics, psychology, physics, history of science

Simultaneous invention