Anti-Fragility

Nassim Nicholas Taleb is becoming one of my favorite authors.  If you ahve an hour, listen to him be interviewed here by reason magazine.  I bought his first book, Fooled by Randomness, which anyone in business should read, and I've listed the book he is currently offering below as well.



   


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Lapin On Elisha

I received a missive from Rabbi Daniel Lapin.  You can too.  But to wit:

A poor, impoverished widow approached the prophet Elisha for help. (II Kings 4:1) He asked her what she had in her house.  Ancient Jewish wisdom indicates that he sent her to search her house several times until she finally discovered a previously overlooked tiny bottle of oil.

The next requirement necessary for a miracle to occur, said Elisha, was that she should borrow many containers, which she did.  He directed her to pour oil from her small bottle into the large drums. 

Miraculously, the oil continued to pour from the miniature bottle until all the borrowed containers were filled with oil.

We know that Elisha wanted to help the widow and that he could summon Divine aid--a miracle.  So why did he force her to search her home repeatedly until she found the tiny bottle of oil?  Once he was going to use a miracle, why didn’t he just make oil flow from a tree or other source?

 Furthermore, why make her borrow containers?  Couldn’t the same God who supplied plenty oil also have supplied many containers?

We study Scripture to extract specific life-lessons we must learn from each story.  These seven verses teach us two things about miracles. 

First, in order to trigger a miracle that can transform your life you have to find within your ‘house’ which is to say, within yourself, some small reserve of resources.  Maybe it is one last bit of energy and optimism.  Perhaps it is the last bit of capital you still possess.  You have to search until you find your tiny bottle of oil.

Second, you must have ‘containers’ into which the blessings brought by the miracle can flow. 

Imagine a man praying to meet a woman with whom to share his life.  But other than prayer, he takes no steps to trigger an encounter.  Furthermore, he has no job and no home and is nowhere near ready to get married.  He has violated the rules of Elisha.  He has failed to find within himself even a small catalyst for transformation.  Even if God brings him the woman of his dreams, he isn’t ready to do anything about it.  He has failed to have ready ‘containers’ for the blessing.

We want so many things: love, financial security, health, abundance, fulfillment and more. Yet, too often, we fail to reach deep enough inside ourselves and offer even more than we think we possibly can. Sometimes, we forget to ready enough containers so that our blessings don’t go to waste.

Now, this story has me thinking too.  Here again, a woman is the subject.  This woman is afraid.  She has reckoned her material wealth accurately, and decided this was all there was to reality.  Yikes, down to a small bottle of oil!  And the creditors will enslave my kids. (Since women could not form debts, her late husband left her in this situation. How often do women find their families threatened by the failure of men in our society which has abandoned women in law and culture?)

I see the tiny bottle of oil as the one thing the woman has.  She has decided it is not enough and implored Elisha for help.  Elisha goes straight to the one thing she has, the oil.  He tells her to borrow vessels.  Now think about that.  She is in such dire straights that she is about to lose her sons (and her future) and she is supposed to borrow from others?  Loans at this time carried no interest (usury) but they were voluntary.  Containers were hand made.  Loaning vessels to this woman may result in loss of vessels.  She is in a jam, she must be even more vulnerable?

Even what little oil she was left with is a gift from God.  And any more would be too.

The wealthy who have so much, so well situated, lose so little and then are paralyzed with inability to respond.

I see people both with little who think what they have is too little,  and people who have lost a little who think what is left is too little, or fear losing even more.

Here is a hard lesson: being self-employed is also personal transformation.  Yes, you may go bust, but the failure has meaning.  Not some trite "learning from mistakes" but changing because you failed to use your talents properly, in particular, to serve others with your talents.

The woman was wrong about what little she had was too little.

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Invitation to Debate on IPR

They have a robust IPR in the UK also.   Here is a "can't live without" item:

Denise, 48, spent five years designing a walking stick with a light for illumination at the feet, flashing red lights down the side (giving 360 degree visibility to oncoming traffic), a panic siren, an internal magnet for picking up small items such as keys and a wind-up battery option, following an accident in 1998.

We all love a system the works for us, but what is strange is when people find out in practice it does no such thing, they don't adjust to reality, they keep at it until is destroys them:

Denise, based in Bristol, says she has no capacity to address a dispute relating to IP without money to do so through the Civil Courts and says ‘the big boys who have their own legal teams in-house can walk in and take others’ products’.

She adds: ‘I have spent so long trying to sort out the mess over the stick and financially I am unable to take civil action. However I am raising a petition to Government to protect others from enduring what I did. It threw me into complete disarray and I lost my income and livelihood.

I think there is a pattern here:  a stick that says "look at me, I am a victim" and a petition that says "look at me, I am a vicim."  Such are the clients of intellectual property lawyers.

In a related article we find...

He is regarded as one of Britain’s greatest inventors after creating the wind-up radio in the 1990s.

But 20 years on, Trevor Baylis says he is ‘totally broke’ and has to sell his beloved home.

Despite the success of the wind-up radio, the 75-year-old says he has received very little of the profits.

...

Mr Baylis, who was recently named among the 50 greatest inventors in British history, said:  ‘If people are not going to be rewarded for their inventions, then why should they invent at all? This nation was built on inventions and manufacturing.


A wind up radio?  That is one of the UK's top 50 inventions?  Mr. Bayliss, people invent to solve problems.  Then they either sell the solution or contract with someone who can.  Just because a system invites you to become a layabout does not mean you are obliged to become a layabout.  If you wanted compensation for your idea, you could have manufactured and sold it.  As it is you want to criminalize people willing to work for a living.

He goes on:

Mr Baylis added: ‘The Government should offer financial support, advice on developing people’s inventions, and help to keep that manufacturing here in the UK.

‘It would make money for the British economy.’

Prove it.

I have been paid by a law firm to come stand and deliver on the topic of intellectual property rights.  I would welcome the opportunity to debate on youtube an IPR attorney on IPR.

Resolved: Intellectual Property Rights harm our commerce and industry.

Debate!

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Even More on 15 Points

But John those people in Norway are selling their design to other countries or are they just serving their local market...

The local market is almost always the most important market in international trade, but they are doing both.

I mean I cannot believe someone in Norway, a country of 5 million people, could be thriving just importing and selling to his Norwegian customers...

Why can’t you believe it?  In 1800 the population of the UK was ten million.  people sailed halfway around the world for tea to sell to that population.

In your chapter of costings and getting sales-reps, if I am not mistaken, I though that I would need a great market if I wanna secure a minimum amount of products in a workable amount of time...

A great market may help, but what makes you think it is necessary, or sufficient?  What if a great market like trying to get a sip of water from a gushing sewer pipe, but a small market is like trying to get a sip from a water from a  garden hose?  What if because a market like Norway is fairly homogenous, there is not particular need to target market, and you actually “secure a minimum amount of products in a workable amount of time...” faster?  The fact is you do not know, and should test it.

No I didn´t mean to target all 300 millions american but. The market in the USA will be bigger for any kind of product compared to my country of 17 millions just considering the amount of potential consumers... 

Am I mistaken?

***Yes, you are mistaken.  There is no such thing as “potential customers” short of the definition of ready, willing and able.  Ready willing and able only occurs upon an offer to sell to someone ready willing and able to buy.  

Someone might be ready, as in the need a good sweater now, and they see yours.  And they are able, because they have the money.  But they are not willing because they do not like your design.

Someone might be willing, as in the need a good sweater now, and they see yours, and they like your design.  And they are able, because they have the money.  But they are not ready because they want to see other options.

Someone might be able, as in they have the money, and they like your design, but they are not willing because they don’t need or want another sweater.  

Now salesmen can work to overcome those objections, but the low-hanging fruit is to get in front of those ready willing and able to buy now  In USA, that means coering the whole country, and we have the means to do so.  In Norway, given homogeniety, it may be easier to find the ready willing and able for your item.  In USA, they just may be far fewer and far more geographically apart.

Again, we know absolutely nothing about the markets we approach. There are people who buy, and those who do not.  The people who buy must be approached in some way.  Hence my point on reaching all 350 million americans, especially in light of ready willing and able, being a non-starter.

Since we cannot know, we test first.  Then we know a little bit, but only enough to go to the next step.

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How USA Intellectual Property Laws Give China an Edge

It  is absolute madness that the US Taxpayer bails out GM, who in turn takes the money to build cars in China, and keep the profits for themselves.  And for a mere 2 billion in profit, what does China get?

International operations including China generated a pretax profit of $473 million for the quarter ended Dec. 31 compared with $373 million for the same period in 2011. Profits for the full year in unit rose 15% to $2.19 billion.

China gets USA best practices, which are static for lack of competition in USA.  China gets a dead in the water competitior since USA is in industrial lockdown compliments of our intellectual property regime.  With the bailouts of GM the taxpayers at a minimum should have been given all autommotive patents open-sourced.  Get rid of the barriers to entry.

Another field USA is falling behind is 3D copiers, because well, copying is a crime in usa.  It is against the law to use your time, talent, materials and equipment to make some things, becuase the state arbitrarily picked some winner, and made you a loser.

3D Copying

"This will mean a third industrial revolution, since localized production can be carried out on demand according to the requests of the customer. The customer will be less dependent on low-cost countries setting up production lines. We particularly see a lot of potential in the medical field, where customization is something that is opening doors for patients, doctors and researchers," Michiels said

I’ve come across another China expert who is agnostic on intellectual propoerty rights, but recognizes there is a problem.  He has an article outlining some examples of working around the problem.

A library director tipped me off when I was marketing high-value scientific literature there. She confided in me that any monograph that I was selling in China would be pirated automatically if it exceeded 75 copies per title. The information allowed me to change my sales strategy. Instead of hoping to sell many copies of a “best-seller” title, I switched my goal to selling limited quantities of the hundreds of titles that we published. China was an extremely profitable market for us as a result.

There are more work-arounds turned into opportunities on his site.  if we want to be competitive, we must end the intellectual property regime in USA.

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More on 15 Points...

This needs to be a post instead of a comment, so here...

Question:

Thanks for replying John. But I focused into exporting because I live in a country with a population of 17 million hab.

I mean the market would be too small to import a product, even if it is a "good idea that doesn´t exist" that is why I think that would be better exproting my idea to bigger markets like the USA.

My country is too small... I mean how can I compare my own country with 17 millions with the USA with over 300 mill? Hence the question I made before...


Answer:

Hmmm... Norway has 4 million people and a lively "compete on design" industry...  How do you know "My country is too small..."  You are only guessing.

I see this happen all the time.  People guess, and then defeat themselves.  "Can't be done."  In business, since we cannot possibly know anything, we must test everything.

If I sell something in the USA, I am selling to a tiny market.  Who cares if it is 350 million people, what marketing I do reaches less than  few hundred thousand people if that.  Do you think because there are 350 million people in USA all 350 million people consider your product?

Say it cost you only 10 cents an impression to reach all 350 million people... that means you would spend $35 million to contact each one once (say with google ads) and one impression is considered pointless, regardless of the means.  If you have no intention or the means of spending $35 million dollars on ads right now, then the fact there are 350 million people is utterly irrelevant.

People start up businesses in a given territory, say Northern California, a population of some 13 million.  Most stay there.  Some begin to spread out, but fact is nobody "starts up" pitching to all 13 million, let alone 350 million.

What you do not know is if you reached several hundred thousand people in your country of 17 million would they be so delighted someone finally designed for them that you would actually do better faster?  Is your marketing system slicker in your country of 17 million (or more rational) than USA, and therefore more effective?

If everyone "knows" "My country is too small..." then that is the most likely thing to test first...  because "everyone" is almost always dead wrong.


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Currency War Handicapping

Mish makes an important point:

The ECB wants a cheaper euro, the Fed wants a cheaper dollar, China wants a cheaper yuan, and Japan wants a cheaper yen.

Mathematical reality says that's impossible, yet that is what every country wants to achieve.
Read more at http://globaleconomicanalysis.blogspot.com/#f7Kx09ua22joKo0W.99 

Yes, but on that list is the world's sole superpower, not only in military but in finance, such as both are estimated.

If the FED goes "nuke" with its financial instrument firepower, will it win?  (Personally I think it would be a pyrrhic victory, but yes.)

There are alternatives.  Free the American people.

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Export Clarification on 15 Points

Anonymous asks, apropos the post below...

Nevertheless what happens if I want to "test the hypothesis" of a product I want to export instead of import to my own country?

So, assuming you mean you desire to export from the USA, while in the USA, back to your home country, then you run into a couple of problems.  The first of which is the very high probability of the error of "organizing around a resource."  By targeting your home country, you are guessing that life will be easy because you know the market, speak the language, you can easily find customers, or "import overseas to yourself" among other delusions.

But instead of me cataloging the litany of problems you can and will run into, I say, as usual, form a hypothesis and test it.  For example, you may say, "I can sell Hershey Chocolate into Sweden and get enough orders to cover the suppliers minimum in a workable amount of time, profitably."  Then test that hypothesis.  (In chapter eight of How Small Business Trades Worldwide - linked below) I run down the decision tree of whether to go/no go.

I mean in your course you mentioned that if I want to import a product with my designs I should first go the customer (retailers) and ask them about the product I wanna design until they say "It´s a good idea that doesn´t exist"....

Which proceeds from the premise that you have experienced a problem and found joy in developing a solution.  It presumes that this business is about you, and not about the accident of having some irrelevant connection to some country overseas.
However what can I do if I wanna export my product to foreign countries? I mean I don´t have the money to go to these countries and to go to each retailer of those foreign countries to "test my idea".

International Trade 101: Your domestic market is always your biggest market.  The exception is the export trading company, and extremely difficult game to get into, usually reserved for the old hands.  (Again, covered in the text.)
What would you do in that situation John? (If you don´t have the $$$ to travel those countries...)
Money is never, ever the problem in business.  If someone says they do not have enough money to do something, HEAR the truth: they do not have enough customers to do something.  It costs no money to prove customers.  Yes, you can spend money proving customers, and people often do, but that would be a waste of money.  The only legitimate bar to advancing is business is to say "I do not have my design good enough yet."

If you look at the graph in my text on page 20, you see the dark band that says "the ocean..." as an importer, you are the importer to the right of that band, in the USA, and the agent overseas is the exporter.  being an exporter in the usa is just to flip that chart, you are the agent in the usa, and the importer is overseas (or, you are the factory in the usa, exporting directly or through an agent in usa.)

With this in mind, it is the importer overseas who is doing the "competing on design."  It is the importer overseas who is testing the hypothesis, and having found that you are the best place in the world to have the product made.  

P.S. The woman in the picture... Is she your wife? you look cute together.That is a sister...  and thanks for the compliment.

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