The Decision Strategist

I received my rejection notice from Ycombinator last night. I’m not too disappointed, mainly because I didn’t have high hopes for being accepted in the first place.

The Ycombinator application process is a great example of principal-agent relationships (touched on in Signal to Noise Ratio in the Consulting Industry). Like all situations in which assets are transferable but not distributed equally, the principal (Ycombinator) has the difficult job of determining who gets the asset, while the agent (the applicant) does their best to appear desirable.

The agent has a big incentive to lie as long as they won’t get caught, and the principal has to deal with not knowing the qualities of the agent with any degree of accuracy.

At Ycombinator their application process is different from most. Their main tactic for eliciting a true view of an applicant is to ask interesting and difficult questions. It is very difficult for an agent to fake worthwhile answers. It’s similar to the hiring methods of Google and the like, focusing on the results of the thought processes of the applicant.

Which is why I don’t understand the questions that my girlfriend has to answer for her med school applications. The questions are typically something like: “Describe how our mission statement fits with your life goals and motivations”.

Everyone hates trying to answer questions like this because they are so open ended. You can’t help that everyone is using exactly the same lines. How many ways can you say that practicing medicine and helping people are very important to you?

Worse, I suspect that the determining factor on these essays is how well they resonate with the admissions officer reading them, which can’t be strongly correlated with the abilities of the applicant.

I suspect that the reason universities ask these questions isn’t so much to determine good applicants, but to weed out the ones who can’t write coherently. It’s an elimination technique instead of a selection technique.

Maybe it also has to do with a difference in the number of applicants they are accepting also. Ycombinator only accepts maybe 10 groups, so they have the luxury of selecting the very best. Universities have to select a much larger group, and so perhaps it is more efficient to simply eliminate the lower 75% instead of searching for the top 2%.

Anyway, this started off being more about principal agent models, but I guess I got sidetracked into the idea of how to evaluate information when there is a poor signal to noise ratio.

There are a lot of other situations that fit the same principal-agent model. Biologically, consider males (agents) competing for the right to mate with a female (principal). Economically, people (agents) compete to be able to work at a company (principal) and on the flip side companies (agents) compete to have their product bought by consumers (principal). Politically, candidates (agents) compete for the favor of the public (principal). In education, students (agents) compete to be accepted to schools (principal).

It’s not surprising that we should find this relationship in so many places, at the heart of the interaction is the need to determine the qualifications of an entity and the entity’s desire to be selected.

Enjoy the weekend.

-zot

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By now you must have seen the news discussing Radiohead’s new album and their decision to shun record companies and release their record by themselves. In fact, they’ve decided to release it online and let people decide how much money to give them. Here’s the link.

Trent Reznor’s doing the same thing.

And then there’s things like Songslide, which lets bands add their music and users pay whatever price they like.

It’s more evidence of changes in the music industry and the failing tactics of the RIAA.

But what I find really interesting are the ways in which bands releasing their music for free are making use of referencing and priming to encourage people to spend money. Radiohead puts an empty price box in which you can put how many GBP’s you want to pay for the album and very little else. Not a lot of an attempt to make people pay more, but other artists do things differently.

There is one artist’s website I’ve seen that lets you pay a price you choose, but explicitly puts the ‘average’ price as one of your options, and tells you what that average is. It’s a great idea for two reasons.

First, having the average that people have given changes the reference point from $0 to a much higher value (I think it was usually around $10). Whatever you were considering paying gets referenced to this average, with the accompanying feelings of guilt (or getting a good deal) when you pay less and the possible pride in paying more. I could see the average backfiring by causing people who would pay more to just opt for the average, but my suspicion is that people not paying much of anything is more of a problem.

Second, it explicitly engages moral self judgment. If you pay significantly less than average, you are more likely to feel cheap or selfish. This self-watching, like pictures of watching eyes, has real effects on peoples behavior.

There isn’t any data on how much people pay for albums in this kind of setting yet, but it’d be very interesting to look at differences in payment based on how the interface for downloading is set up.

I’ve been trying to remember which artist does this, so if any of you know please tell me.

-zot

ps - I really like In Rainbows so far.

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If you are like me, you have a million different things you are interested in, but you never pursue any of them to completion. I float from one project to another as it grabs my interest. This is great for generating ideas, and I think remaining curious is an essential aspect of enjoying life. It’s not so good for bringing projects to fruition.

The typical process goes something like this:

1. Get excited about an idea.
2. Research the idea compulsively to the detriment of other aspects of my life.
3. Work on the project in all of my spare time (and some not spare time).
4. Get disrupted, reach something I can’t figure out, or have to deal with real life.
5. Become discouraged and try to force myself to work on the project.
6. After a few weeks of doing nothing, get excited about a new idea.

It’s a vicious cycle not unlike the problem-solving cycle.

I seem to be doing well on my current project decyder though. I think the difference is due to momentum. How am I creating momentum? Here are three major ways:

The Decision Strategist

This blog is peripheral to decyder, but keeps me thinking about how decision making works in the real world, an idea that is directly relevant to decyder. Though writing for The Decision Strategist takes up a significant amount of time, it keeps me involved and provides an important alternative when I’m sick of working on decyder.

Public Deadlines

The Ycombinator application is due October 11th. I’d like to get a demo of decyder working before then, so I have a very real deadline. Deadlines are great, but hard to enforce without some kind of public commitment.

Making Progress

Making progress is key to building momentum. With past projects I’ve spent an excessive amount of time brainstorming and planning. These are fun activities that get my imagination going, but don’t produce much else. Eventually I lose interest.

This time I decided to basically wing it. Thoughts from Paul Graham, Steve Pavlina, Seth Godin, and others seem to coincide on the value of execution over imagination, so I try and keep my planning to a minimum.

The upshot is that I am accomplishing my goals and feeling less overwhelmed. Instead of having a huge list of tasks, I have only the next few steps. This keeps my goals small and as they say, the thousand mile journey begins with a single step.

Good luck to all of you who are struggling to bring your ideas to life.

-zot

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I received an interesting comment from Isabella at Change Therapy on Problem Restatement suggesting a focus less on the solution of a problem and more on the creation of what you want.

The Problem Cycle

The idea is that focusing on the problem tends not to resolve because you get stuck in a cycle. One of the things I struggle with on occasion is not being motivated at work, and the cycle works like this for me:

1. Problem is bad. I get bothered about my lack of motivation and pursue a variety of exercises to do some values clarification, identification of life goals, and set up structure to enable a better working attitude and environment.
2. Solution works, sort of. These things do help by refocusing my and reminding me why I like what I do.
3. Problem lessens. I’m more motivated and getting more done! Wow this planning and scheduling stuff really works.
4. Motivation to solve problem drops. Now that I’m back to motivated, I don’t actually need to take all that time and energy to write up plans and schedules and update my goals do I?
5. Problem gets worse. In a couple of weeks, I end up back where I was, feeling unhappy and unmotivated.

Come to think of it, for me this process also occurs with exercise.

Instead of focusing on the problem, she suggests focusing on what you want to create. In my struggling with motivation at work, the real problem is that sometimes the work I’m doing is repetitive and boring. By structuring and planning my life, I can artificially make it less boring for a little while, but the ultimate source of the problem is still there.

Forget About the Problem

What if instead of focusing on what I don’t have, I focused on what I want?

I want to make my work more creative, innovative and dynamic. I want it to be exciting. I sat down and thought about the kinds of things I can do to make my work better fit that picture, and this is what I came up with:

1. Eliminate repetitive tasks. I’ve already done a lot of this, but I can do a lot more. Sometimes a lot of my work happens in Excel, but while I’m a whiz at using formulas, I’ve never taken the time to learn to use macros. If I have to repeat the same thing over and over, a macro would definitely help.
2. Take part in creation and planning. While most projects are brought in by senior staff, Taking part in the creation and planning of projects gives me a sense of ownership and control that is motivating. Also, as a project leader the final product reflects on me as a person. Since I want to be known for doing quality work, that encourages me to be more productive also.
3. Delegate. We have a lot of work-study students here, but I rarely take advantage of the time they offer. Some of the less interesting parts of my work can be delegated to students and junior staff.

I’m optimistic about this new plan of attack, but I’m always optimistic when trying something new, so we’ll have to see how well it works out.

There is some reason to think that this kind of focus will be more useful. First, by focusing on the problem we enhance our confirmation bias and our concept of the status quo, which leads to the problem sticking around. By focusing on what we are trying to create, we turn our mental energy toward that, and that becomes the new status quo.

Happy Friday!

-zot

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