November 28th, 2018 · 38 comments
In economics, a network effect is a positive benefit created by a new user buying a product or joining a service. In the context of computer networks, these benefits are commonly believed to scale quickly with the number of users.
In technology circles, perhaps the best known instantiation of network effects is Metcalfe’s Law, named for Ethernet co-inventor Bob Metcalfe, who was likely inspired by similar theories developed at Bell Telephone in the early 20th century.
This law concerned the value of the Ethernet network cards sold by Metcalfe’s company 3Com. It states that given a network with N users, buying one additional Ethernet card provides you with N new possible network connections (e.g., from the new card to each of the N existing users).
It then follows, roughly speaking, that the value of N network cards grows as N^2 instead of N. Once a network achieves a certain critical size, therefore, the value it returns will quickly begin to far exceed the cost of joining it, creating a powerful positive feedback loop.
Metcalfe’s Law is incredibly influential in Silicon Valley, where it’s often applied to justify the monopoly status of the social media conglomerates. If a network like Facebook has over a 1,000,000,000 users, the law tells us, then its value to users grows as (1,000,000,000)^2 — a quantity so vast that any attempt to compete with this giant must be futile.
It’s widely believed among many Silicon Valley types that this calculus helps explains the lack of venture capital investment in new social media start-ups in recent years. The power of network effects in this sector is unimpeachable.
But should they be?
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November 19th, 2018 · 29 comments
As a big time Washington Nationals fan, I’ve been watching Bryce Harper play here in D.C. since he was first brought up to the majors at the age of 19. As you might therefore imagine, I’ve been closely following his free agency this fall.
It was due to this hardball diligence that I recently noticed a small sports page news item that intersects with the types of topics we like to discuss here. A couple weeks ago, Harper declared he was going on a social media fast. He even ironically (oxymoronically?) introduced a hash tag for his effort: #teamnoscroll.
I applaud Harper for his public step back from social media, especially during a period of intense scrutiny where checking the latest buzz would only increase his anxiety.
But reading about #teamnoscroll prompted an interesting thought: Why aren’t more superstar athletes permanently disengaged from social media?
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November 7th, 2018 · 19 comments
On Screens and Surgeons
Atul Gawande has a fascinating article in the most recent issue of the New Yorker about the negative consequences of the electronic medical records revolution. There are many points in this piece that are relevant to the topics we discuss here, but there was one observation in particular that I found particularly alarming.
Gawande introduces the Berkeley psychologist Christina Maslach, who is one of the leading experts on occupational burnout: her Maslach Burnout Inventory has been used for almost four decades to track worker well-being.
One of the striking findings from Maslach’s research is that the burnout rate among physicians has been rapidly rising over the last decade. Interestingly, this rate differs between different specialities — sometimes in unexpected ways.
Neurosurgeons, for example, report lower levels of burnout than emergency physicians, even though the surgeons work longer hours and experience poorer work-life balance than ER doctors.
As Gawande reports, this puzzle was partly solved when a research team from the Mayo Clinic looked closer at the causes of physician burnout. Their discovery: one of the strongest predictors of burnout was how much time the doctor spent staring at a computer screen.
Surgeons spend most of their clinical time performing surgeries. Emergency physicians, by contrast, spend an increasing amount of this time wrangling information into electronic medical systems. Gawande cites a 2016 study that finds the average physician now spends two hours at a computer screen for every hour they spend working with patients.
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November 1st, 2018 · 17 comments
The CAA Way
I’m currently reading Michael Ovitz’s engaging new memoir. Even if you don’t know Ovitz, you definitely know his clients’ work. He’s the super-agent who co-founded the domineering CAA talent agency, and during the 1980s and 90’s become one of the most powerful figures in Hollywood.
In his memoir, Ovitz emphasizes the importance of communication in the talent business. For a talent agent, he notes, your time is one of the primary resources you have to offer, so to succeed in this field, you have to constantly talk to clients, potential clients, ex-clients you might want back, and all the assorted figures in the entertainment world orbit who might have information helpful to your clients.
One of the cardinal rules during the early years of CAA was that you always returned every call the same day. Ovitz personally exemplified this rule. He would start making calls as soon as he woke up and continue making calls until right before he went to bed. He would make hundreds of calls every day.
The importance of these touches were so important that he had a small sign that read “communicate” placed on every phone in the I. M. Pei-designed CAA headquarters.
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