Just enough

Another gem from Grant McCracken talking about the trend to Just-Enough:
“In the case of an entrepreneur, “just enough” is about control.  Staying small(ish), staying private, supplying your own capital, all these mean calling your own shots.  Venture capitalists and Wall Street can drive someone else crazy.  The just enough entrepreneur can take his or her own chances.  When it comes time to choose between interesting and profitable, you can go with interesting.  Just enough in this case is about control.”
A nice example of what he is talking about is David Heinemeier Hansson’s talk at Paul Graham’s Startup School at Stanford University, 9 April 2008. Watch the video and hear some sense.

Not fluffy bunnies

I had been planning to write a follow up to a piece I wrote about a year ago “Saving the Planet is easy”, only to find that Jamais Cascio had already done it in an essay more elegant than mine would have been. (Thanks to John Naughton for the link) Here is the opening; read the rest:
“The grand myth of environmentalism is that it’s all about saving the Earth.
It’s not. The Earth will be just fine. Environmentalism is all about saving ourselves.”

So let’s say it one more time, ” Environmentalism is all about saving ourselves”, not about saving fluffy bunnies.

A map is not the territory (revisited)

Back in 2003 I wrote a piece,“A map is not the territory”, which I re-read today. Sadly some of the links are now broken and, of course, some of the statistics could be updated, but never-the-less it seems more pertinent today than when it was first written, so I reproduce it here in full:
October 16, 2003
A map is not the territory
In the past I have often used Alford Korzybski’s much quoted “A map is not the territory” when I have hit situations where our perceptions or models don’t seem to accurately reflect what is going on or what a situation is.
It was only very recently I came across a fuller version of this quote that seems much more interesting; “A map is not the territory it represents, but if correct, it has a similar structure to the territory, which accounts for its usefulness”
If we think of the world of finance as a kind of map of the world of people creating, making, building, buying, selling, exchanging goods and services I am beginning to wonder how well the map represents the structure of what is going on. I have a growing sense of a disjunction between the two. And, if there is, may be we have to question how we think about finance, economics and the real world of productive human activity.
Let’s start with some figures drawn from a number of different sources:
In 1975, about 80% of foreign exchange transactions (where one national currency is exchanged for another) were to conduct business in the real economy and about 20% of transactions in 1975 were speculative. Today, the real economy in foreign exchange transactions is down to 2.5% and 97.5% is now speculative.
At the end of the 1970s, the stock of financial assets in the world’s leading economies was worth about the same as the “real” assets that underpinned them; today, financial assets are valued at three times real assets.
The use of derivatives has grown exponentially in recent years. The total value of all unregulated derivatives is estimated to be $127 trillion — up from $3 trillion 1990.
Chief executives now earn more than 280 times their average employee, compared with 42 times in 1982.
In contrast
The United Nations estimates that world GDP grew at an annual rate of 5.4% in the 1960s, 4.1% in the 1970s, 3% in the 1980s, and 2.3% in the 1990s.
And as C.K. Prahalad and Stuart L. Hart write “According to the United Nations, the richest 20 percent in the world accounted for about 70 percent of total income in 1960. In 2000, that figure reached 85 percent. Over the same period, the fraction of income accruing to the poorest 20 percent in the world fell from 2.3 percent to 1.1 percent.”
And go on to say:
“At the very top of the world economic pyramid are 75 to 100 million affluent Tier 1 consumers from around the world. This is a cosmopolitan group composed of middle- and upper-income people in developed countries and the few rich elites from the developing world. In the middle of the pyramid, in Tiers 2 and 3, are poor customers in developed nations and the rising middle classes in developing countries.
There are 4 billion people in Tier 4, at the bottom of the pyramid. Their annual per capita income — based on purchasing power parity in U.S. dollars — is less than $1,500, the minimum considered necessary to sustain a decent life. For well over a billion people — roughly one-sixth of humanity — per capita income is less than $1 per day.”

At the same time there is a general consensus that almost every industry is plagued by excess capacity. Nearly five years ago Lester Thurrow wrote, “The world is awash in excess capacity. Take any product, estimate how much the world could make if all of the world’s factories were running at capacity, subtract expected 1999 sales, and there is at least one-third excess production capacity for everything.”
In the following years little seems to have changed.
These fragments look like a pattern to me and show a gap between what our world could be providing for our people and what it actually does. For some, no doubt, the pattern will look like the same old story of the rich and powerful grabbing what they can and undoubtedly there is some truth in that. What I wonder is whether there is another kind of story? Whether the spectacle of the pigs with their snouts in the trough is a transitory phenomenon as we pass from one kind of economic world to another?
Maybe, lurking in this pattern, this very crude map I have drawn there are some other possibilities. At some point the world of finance and the real economy have to reach some kind of equilibrium, anything else in unsustainable. And, maybe the route to that equilibrium involves a shift from thinking about problems and thinking instead about capabilities.
To use a quote I have returned over and over again for many years:
“The great landscape gardener, Lancelot Brown, when confronted with a client’s estate, did not say “what is your problem?”, he asked “what are the capabilities of this piece of land?”. Optimism, generality, and scope flowed where otherwise all would have been pessimism, specificity, and narrowness. That is what is wrong with conventional wisdom: not enough Capability Browns and too many Problematic Tom, Dicks and Harrys.”
Perhaps it’s time we found a few Capability Browns to look at the territory and to construct some new maps of what they find. Conventional wisdom seems to be heading us in a downward spiral, maybe some unconventional wisdom will help us move in an upward direction.

Cashing in?

“Sometimes people ask us if we are tempted to sell the company or cash in on the success, but we don’t want to. I think that’s another side effect of our just running the company exactly the way we feel good about running it, which is trying to maximise the number of happy e-mails we get from people who’ve assembled their whole lives on the site for free. We all make very good livings and … [have] plenty in our bank accounts, so we’re making plenty of money as it is, so it’s not at all that tempting.”
JIm Buckmaster of Craigslist in an interview in the Times last month.

Improvisational drift

“In its very nature, successful economic development has to be open-ended rather than goal orientated, and has to make itself up expediently and empirically as it goes along. For one thing, unforeseeable problems arise. The people who developed agriculture couldn’t foresee soil depletion. The people who developed the automobile couldn’t foresee acid rain. Earlier I defined economic development as a process of continually improvising in a context that makes improvisations into everyday feasible. We might amplify this by calling development an improvisational drift into unprecedented kinds of work that carry unprecedented problems, then drifting into improvised solutions, which carry further unprecedented work carrying unprecedented problems…”
Jane Jacobs ‘Cities and the Wealth of nations”, Pelican Books, 1986, pp221-222 ISBN 0-14-022677-X