Monthly Archives: August 2009

Lessons and Impressions from China

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It's said that after spending a week in China, you can write a whole book about the country. After spending a month in China, you can write a really nice magazine article about it. After a few months, a blog post. And after a year, you can't write anything, because you discover how little you actually know.

I've spent the last three weeks in Beijing, which brings total time spent in China to five weeks, which means I better crank out a blog post lest I spend too much more time there and get rendered speechless by the country's complexity and contradictions.

Here are some of my high level impressions and lessons from this most recent trip which included two weeks of lectures, seminars, and organized conversations with various Chinese students, professors, and leaders.

1. The moral consequences of economic growth. The main story about modern China should be its economic growth and immense reduction of poverty. According to Kishore Mahbubani, China's modernization has already reduced the number of Chinese living in absolute poverty from 600 million to 200 million. According to Larry Summers, at current growth rates in Asia standards of living may rise 100 fold, 10,000 percent within a human life span. This is one of the great stories of our lifetime. To begin a conversation about China with any other topic misses the point. Freedom is multi-dimensional. Flush toilets and clean water matter more than abstract rights such as a free press. Let us celebrate the emancipation of millions from the chains of poverty.

2. A rising tide lifts all boats. It's easy to say the "US and China have more in common than they have different" and cultural exchanges will emphasize this to no end. It is true. But we ought to go further. We ought to more forcefully emphasize the non-zero sum dynamics of economic growth. I talk about this in my post "Rising Tide Lifts All (Nation-State) Boats." Too many in the West see Chinese economic growth as competitive to Western economic interests. To the contrary, a richer China, with more consumers of expensive products and producers of sophisticated ideas, benefits us.

3. Scale and scope. It is hard to generalize about a country so big. There are many Chinas, not one. Fallows: "The most obvious thing about today's China is how internally varied and contradictory it is, how many opposite things various of its people want, how likely-to-be-false any generalization is."

4. Day-to-day life for me in China was hard. It is too polluted. The censored internet is a pain in the ass (though not to Chinese people — 84% of Chinese internet users think the internet should be controlled by the government). The noise and chaos and dirtiness leave me drained. The wildly overstaffed and undertrained hospitality sector. Cheap and tasty dumplings and noodles aside, the food is too spicy and greasy for my taste, and this individualist does not much like family style serving. Jaw-dropping purchasing power with the dollar does not make up for these annoyances. Yet, I will return to China. I will continue to read articles and books about it. I will do more business in China. Do Americans under 35 have a choice? Does anyone in the world, alive today, who pretends to be up on world events, have a choice? Ignore China at your own peril.

5. What's changed since 2006. Since I was last there, Beijing has seen some remarkable upgrades, thanks mainly to infrastructure put in for the 2008 Olympics. They've added several new subway lines in the last few years, all very modern and efficient. The Beijing airport is a marvel — among the largest and best organized I've been in. There was less honking and more organized traffic flow on the streets. I noticed more people playing basketball, billboards for the first time promoting Kobe Bryant, LeBron James, Baron Davis, and others, and many NBA jerseys worn by locals. Yao Ming was less prominent than his American counterparts. All in all: "As a rule of thumb, Beijing changes as much in three years as Boston does in 30."

6. Media bias. Some Westerners believe that the government-controlled media brainwashes the Chinese people. By the same token, the Chinese students I spoke to are convinced the West has an anti-China bias that may be subtle but is equally misleading. They point to American media's coverage of Tibet in particular. Both sides are right, but both sides exaggerate.

Western media's anti-China bias isn't as strong as China's anti-West bias — China's propaganda is an official government organ, the Western press's bias is rooted in nationalism, "fear of the other," economic illiteracy, etc — but biased it is, and Americans ought to be more skeptical when they read about contentious issues in China in their local newspaper. And China's state-run media is not as outrageous as "state-run propaganda" would lead you to think. I watched an English program on CCTV once and it was surprisingly critical of the government and spoke frankly about poverty and minority unrest in the west. The weekly magazine put in the seatpocket of the train to the airport, in the English language pages, leveled various criticisms at the government. One article said that "there was little respect for rule of law" by businesses in China. Another mentioned government corruption. To be sure, the news bias in strongest probably in what it does not report — sins of omission more than sins of commission.

7. Tibet, Taiwan, Africa. These are three issues of international controversy. I am not well informed on any of them. Chinese people insist, with some defensiveness, that Tibet and Taiwan are "domestic" issues. (Here's an overview of the intellectual shoddiness of the Free Tibet movement and the popular misunderstanding of what's happening there.) In the case of Africa there's considerable more agreement from Chinese and foreigners alike that the government, thirsty for oil, should stop selling weapons to Sudan and others, and stop hindering U.N. Security Council moves to send peacekeepers to the region.

8. Chairman Mao. Three years ago, I remember having a conversation with my college aged tour guide at the Forbidden City. After she snapped my picture under the giant Mao portrait at the entrance, I asked her what she thought of the guy. She spoke in glowing terms. I expected a more hushed response from an educated person. This time around, I again encountered Mao enthusiasm from youth and adults alike. The line you'll hear over and over — first popularized by Deng Xiaoping — is that Mao's contributions to China were 70% good, 30% bad. The "good" referring to his keeping the country together during and after the civil war and uniting diverse factions to stand as one China. On the "bad" side, Mao Zedong's devastating economic policies (Great Leap Forward, Cultural Revolution, etc) brought death to ~ 50 million Chinese people ("officially" it's 20 million). This puts Mao slightly ahead of Stalin and Hitler in the battle for "20th century's worst killers." 70/30 seems, then, generous, no?

9. Obsession with foreign image / perception. Just one example of how obsessed China is with its image abroad: at Tsinghua University, one of the most prestigious in the country, the dorms for foreign students have two beds per room, and three two-hour cycles of hot water in the bathrooms. The dorms for Chinese students, by contrast, have four bunk beds to a room and only one or two cycles of hot water a day. I hear the same is true at other universities in the country. Can you imagine if at American universities the foreign students got put up in posh dorms while the American students made do with less? Scandalous. In fact, it's the opposite in the U.S.: foreign students get screwed, most significantly in the financial aid process. (This approach is not unique to China. In North Korea, I'm told the hotels foreigners are put up in are top-notch, while the locals starve and suffer.)

10. Toward a consumption economy. Macro-economists talk most about China moving from a savings / exports / investment driven economy to one fueled more by domestic consumption. The very insightful Michael Pettis, who spoke to us, pointed out that this transition won't be without a lot of short-term hurt and complications.

11. Democracy and liberalism. The Chinese people I spoke to say democracy will come, but China is a big country, with a long history, and things take time. I have a hard time seeing the CCP relinquishing or distributing power anytime soon. In all things China the long run is very long indeed. Chinese leaders have been saying "we're almost ready for democracy" forever — apparently Mao made such references in his speeches. College students are no different from their elders in this long-run attitude, which I assume has been the case since 1989. By the way, it would help if "democracy" got dissociated from "America" — the two are conflated and this does not help the cause. Also, it's important to broaden the understanding of democracy from simply casting votes to a society that has liberal institutions, too. Bottom line, I do not believe China will ultimately prove an exception to the idea that more capitalism brings more openness; with wealth will come political liberalization. It's just a question of when.

12. "China" doesn't equal "China's government." The economist Scott Summer, in his very insightful post on China, says when we hear the name of a country, we often think of the country's government. But there is more to a country than its government. Americans made this point in earnest during the George W. Bush era. It's important to bear this in mind with China. Its government may be communist and oppressive and brutal toward its own people at times. But that's not the whole story. China is more than the CCP. There are many levels of a society. "When intellectuals talk about foreign countries they often use the name of the country to denote the country’s government, without even saying so. I think that can subtly distort one’s judgment," says Summer.

Other random impressions and nuggets:

  • China's per capita GDP is half that of Brazil. It's a poor country. Even if you don't see this poverty in Beijing and Shanghai, there are still little examples to notice. I would attribute certain eating customs, like the practice of using only one plate or bowl for everything (no side plates for different dishes), to not having many plates to begin with and not wanting to wash as many plates (by hand) at the end. There are no paper towels and soap in public bathrooms. Sanitarily problematic, of course, and ironic given the government's hysteria over swine flu, but millions of paper towels are expensive to stock, and probably the way it's been for awhile. My point is that even in rich cities like Beijing and amid the Fifth Avenue-on-Steroids wealth-display near Wangfujing, for example, evidence of the third world abound.
  • Micro-observation: Chinese people say "ahhhh" a lot in conversation to acknowledge the other person speaking. Whereas Americans might say "uh huh, ok, yep, got it, mmm" to signal to the person speaking that they're with 'em, Chinese people more aggressively say, "ahhh" in the middle and at the end of points the other person makes. I compared this impression to Americans who speak Chinese and they confirmed that it's the case.
  • Culturally influenced tics or habits are fascinating. In America — maybe elsewhere, I don't know — a person will express indifference by shrugging, emitting something that sounds like "eh," cock their head slightly in one direction, and make a facial expression that says, "I don't care." Watching an American try to explain this to a Chinese person, and wondering how many other things I say or do that I simply absorbed from the culture (as opposed to being explicitly taught), awesomely reinforced the diversity of human experience.
  • At all of our dinners the beverages of choice were: Coke, Sprite, and hot tea. I don't get this. Do people in China just not drink as much cold water? I know in poor countries where you can't drink the tap water bottled water can be more expensive than beer or soda. Does this explain it? Are there any health consequences? Are there high levels of dehydration in China? Of course, as a recovering waterholic (you're always "recovering," it's a life long affliction), my quest to find drinking water abroad has been the theme of my travels for years, so I'm used to it.
  • KFC in China is like Starbucks in Seattle. They're everywhere. The food is tastier than in America, and just as expensive.
  • Why does food in restaurants come so quickly? Do they cook in advance and re-heat? While Chinese food in China and Chinese food in America are different, quick turnaround on the order is the case in both places.
  • Squat toilets I had to use several times. Horrible. For those who haven't had the pleasure, a squat toilet is a flush-toilet but built into the ground. No seat to sit on. As a sign that "a fish doesn't know it's swimming in water" — of how you don't see strange what's "normal" to you — the Olympics organizers in 2008 installed squat toilets in most of the stadiums. After lots of preemptive complaints from athletes, they ripped them out and installed Western style toilets in time for the competitions. Related note independent of toilets: the streets of Beijing are lined with people squatting to rest on the street. Kind of endearing, actually, that there's a trademark way to sit.

Here are my other posts on China on my travel blog. Here is my "lessons and impressions" post from my trip three years ago. Here are old posts of mine: on China's infrastructure projects, why freedom there is not bimodal, what we can learn from China's driver's ed, here's what Russians and Chinese have in common. Here's the best book I've read on internal political issues in China. Here's the best narrative / memoir I've read about China.

(Thanks to the IMUSE staff and Harvard and Tsinghua for sponsoring the conference in Beijing.)

Sports Fandom is the Same the World Over

I went to a soccer game in Beijing (Beijing vs. Chengdu) and my takeaway was simple: sports fandom is sports fandom and intense, crazy fans are all over the world. It’s universal. Nothing felt as global / common as the soccer game experience.

The Great American Roadtrip

Legendary American travel writer Paul Theroux took a roadtrip through his own country and wrote about it beautifully in this month's Smithsonian magazine. Discovering America by car is not exactly virgin territory journalistically speaking — see Steinbeck, Kerouac — but Theroux still manages to refresh our understanding of this beautiful place.

My favorite sentence is, "Listening to music while driving through a lovely landscape is one of life's great mood enhancers" and my favorite paragraph is his last:

A trip abroad, any trip, ends like a movie—the curtain drops and then you're home, shut off. But this was different from any trip I'd ever taken. In the 3,380 miles I'd driven, in all that wonder, there wasn't a moment when I felt I didn't belong; not a day when I didn't rejoice in the knowledge that I was part of this beauty; not a moment of alienation or danger, no roadblocks, no sign of officialdom, never a second of feeling I was somewhere distant—but always the reassurance that I was home, where I belonged, in the most beautiful country I'd ever seen.

That's high praise coming from a man who's spent 40 years traversing the globe. And of course, I agree.

My 2007 roadtrip — Colorado to Boston to San Francisco — taught me that the American west's beauty continues to be underrated by almost everyone, but especially east coast city dwellers and foreigners who've never heard of Utah (the most beautiful state in the union). That driving can be a flow-inducing activity. That assembling the MP3 playlist for a long drive is half the fun. That every male ought to pee off the side of a deserted highway in the middle of nowhere, and every American ought to dine at a trucker's cafe in Nebraska and order the house pie with a side of milk.

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Here is a touching video of school children singing "Pictures of You" by The Cure. Here's a surprisingly poignant video of ordinary moments.

Village Outside Beijing and Spending Two Hours in a Police Station

I took a 2.5 hour bus from Beijing to a village outside the city, aiming for a couple days of relaxation and reading. City life, especially a day as large and hectic as Beijing, can be draining, and a village in the mountains sounded like a nice reprise.

I packed a backpack with a few clothes, some toiletries, a copy of my passport, my Kindle, and a couple old-fasioned books, and set out for the subway which would take me to the bus station on the outer western side of the city. Unfortunately, with no access to a printer (truly unfortunate when you need to print out Chinese characters), I had only the pinyin name of the village.

It was my first time riding the subway alone which means I had to decipher the signs and figure out my route. It was easier than expected, with much additional English signage added in preparation for the Olympics.

I arrived at the subway station, exited, and tried to find the bus stop for bus 192. This proved more challenging. I asked a couple people, got pointed in a direction, and eyed the signs for the 192 stop. Eventually I found it, but I was already pretty tired, and I noticed the sky go from grey-from-smog to grey-about-to-rain, and I considered turning back and abandoning my village trip and just staying in Beijing to read.

At the 192 stop there were lots of taxi hawks and other people hassling me, screaming at me in Chinese, etc. The usual fare. When the bus arrived, I boarded, showed the ticket lady my destination. We tried to communicate. She pointed out of the bus and ahead on the road, as if I were not on the right bus. This confused me — two locals I had asked on the street said 192 in this direction was the right way, as did the online guidebook I consulted. The taxi hawks followed me onto the bus and started screaming “No! No! No!”.

I got off the bus. I walked ahead in the direction the woman pointed, as much to get out of the sight from the touts as much as to find the right bus.

Luckily, up ahead I found another stop, and waited, and a bus came. This time around, the ticket man looked at my destination and told me to come on-board. I gave him my pen and notebook (which I always had at the ready) and he wrote down the fare. 16 RMB. I paid and sat, awaiting the two hour bus ride ahead.

By this time it was already about 5:30 PM and darkness was approaching. Not good, because I was to arrive in a small town, and then find a taxi to take me to the village. Harder to do in the dark.

The ticket man tried to talk to me as we approached my destination — what he was saying, I have no idea, I just prayed he wasn’t trying to tell me the town was sketch or that there were no taxis or something.

I got off in Zhangtaing (sp). By now it was 7 or 7:30 PM and pitch dark. I couldn’t see anything, let alone any taxis who would be able to take me to the village that, while somewhat known, I did not have written down in characters so all bets are off. I decided 10 seconds after arriving in the town that I would go to the village the following day, and stay at a hotel in the town.

It was drizzling rain and there were puddles. I had to badly go to the bathroom, and I was also starving. The first people I bumped into started harassing me, of course — what they said, I have no idea, but it does pretty tiring to always be accosted and sold to.

I walked into a restaurant — their door, like so many restaurant doors, is not a door but rather vertical, cut pieces of plastic that you push open and through. Everyone at the restaurant turned and looked at me and laughed or talked amongst themselves while pointing at me. In small towns, away from a big city, they don’t see many tall, white men.

I made the eating motion with my hands (mime the hand sipping soup with a spoon by my mouth), the “waitress” nodded and told me to sit. A few people stood by my table and watched me. I flipped through the menu, which luckily had pictures, and once again faced the predicament of eating alone at a Chinese restaurant. Since everything is family style, it’s hard to pick dishes for just one person. You usually have go to with dumplings or noodles. Because I was feeling hungry, I ordered two full family style dishes.

After placing the order, I tried to ask how to go to the bathroom. In most parts of the world, saying the world “toilet” does the trick, but not in China. After a good full minute of body language miming, they figured it out, and pointed outside the restaurant, and across the street. That I was not going to do. I did not know whether I should fully trust the restaurant staff, and frankly the darkened shack across the street looked intimidating. So I held on.

I ate the food, paid the $1.50 it cost me, and then wrote the word “hotel?” on my notebook and showed it to them. They did a translation or figured out the word and made a phone call. Then one of the guys led me outside, to the left, and to the front of the police station. At first I hesitated. The last thing I wanted to do was deal with the police, and I thought they had maybe misinterpreted my request for a hotel. Then I remembered that Chinese law says foreigners are supposed to check in at a town wherever they spend the night.

This is where the real clusterfuck began. No one in the police station spoke the slightest bit of English. Not a single word or sound. As usual for China, it was wildly overstaffed, with about eight officers sitting in their chair, doing nothing.

They asked for ID. I first gave them my California iD card. Not, they needed more ID. Then I gave them the copy of my passport. No, they still weren’t satisfied. Then I realized that I was majorly screwed without my real passport. I considered bringing it, but decided against, thinking there was an above-0 chance I just stay the day in the village, and when it’s on my person and I’m robbed, I’m really screwed.

They talked among themselves and tried to communicate to me but failed. I didn’t really know what the hold-up was. One cop called a friend who spoke very broken English, and he got on the phone with me and told me, “They must require you passport.”

This was the problem. They kept thinking I had my passport but wasn’t showing it; in fact, I was trying to tell them I only had a photocopy. We were in a standstill. No one knew what to do.

I finally got the phone and called my contact in Beijing who spoke both languages. She explained my situation to the cop. They went back and forth a bit. Then the cop called his supervisor in Beijing who spoke a bit of English. They agreed I needed to leave the town right away and return to Beijing to be with my passport. “According to Chinese law it is illegal to travel without your passport.”

I got on the phone with the supervisor. We had an exchange, and then he said sternly and weirdly solemnly, “Sir, it is in your best interest to leave the town immediately.” For some reason this kind of freaked me out — I sensed some subtle warning in his voice, like if I didn’t leave the town something was going to happen. Something bad. So I agreed to leave, but how? It was almost 10 PM and Beijing was three hours away by car. The supervisor told me to take a 100 RMB taxi. He then checked with the local cop if there were any taxis…but no. There were none.

So they told me I was to stay the night at a hotel, but leave at 8 AM the next morning. I agreed. They walked me to a hotel. I paid 200 RMB and go on my bed and read.

The next morning was grey and drizzily. I left my hotel at 8:30 AM, wandered around the streets of the town a bit. Nobody was working. Dozens of people standing on the street, doing nothing. Not exactly surprisingly — there are few businesses in the town, other than a hotel or two and a restaurant or two. I’m guessing unemployment in the town is 40% or so.

Then I went to the bus stop, and went back to Beijing. No village, no reading getaway. Just some time in a bus and some time in a police station.

Is Writing Advice Around “Voice” Like Career Advice Around “Passion”?

Career advisors obsess about passion: Pursue your passion, do what you're passionate about, follow your bliss, love your work, etc.

I don't disagree that it's glorious to engage in work you are passionate about.

I do question the usefulness of making passion the center of work-related advice. That's because passion doesn't seem to take very well to a direct approach. That is, directly asking yourself, "What am I passionate about?" seems as often to lead to a self-delusion as a truth, and most of the time leads to, "I don't know" or "Many different things, equally" which, if the reflective cycle stops there, has produced nothing but a bit more anxiety in an anxious world. Better, for example, to first recognize that passion alone does not a happy career make, and then second, approach the idea of passion indirectly. As Gretchen Rubin says, avoid the ambiguity and overwhelmingness of "passion," and instead ask yourself what you like doing on a Saturday afternoon with nothing to do.

I wonder if there's a parallel in the writing world with all the advice around voice: Find your voice, write in your own voice, the best writing has a distinctive voice, etc.

In Louis Menand's piece on teaching the craft of creative writing, he notes:

"Show, don’t tell," which was the mantra in the nineteen-forties and fifties, to the effectively opposite mantra “Find your voice,” which took over in the nineteen-sixties and seventies.

In this informative Q&A with Farrar, Straus, and Giroux president Jonathan Galassi, he says:

All of these [great] books are different in terms of their angles of attack, but they're all very strong voices. And they don't sound like anyone else. I think the voice is the most important thing—and then the shape. … Voice is one way of looking at it but aliveness is another way. And I think voice is kind of being killed in a lot of writing today.

As with careers and passion, I don't disagree with the fundamental point here, but I do worry about the intensity with which this advice is dispensed to aspiring writers. How, exactly, are you supposed to improve the "voice" of your writing? How do you know whether the sound of the words on the page are most true to you? What is "aliveness" and can not writing have bounce in its step but still lack a singular voice that would be familiar if you heard it again? How does "find your voice" square with advice to "imitate the best"? How, exactly, are you supposed to synthesize the best of other writers you are imitating — and how do you know whether your synthesis is your own voice finally or just a pale collection of imitative gimmicks, smashed together?

Perhaps all this self-consciousness about "voice" is a good thing, but perhaps, as the questions above illustrate, it's needlessly inducing stress, and distracting from other, better focus points of writers (namely doing the thing — actually writing and putting faith in the process of constant revision).

Jesse Berrett, with whom I email about writing issues, once told me that there's hope for all of us to better approximate that voice we hear in our heads. I like the attitude built-in to this statement. "A hope for all of us" rightly highlights that approximating the voice in our heads into words is an on-going project for everyone at every stage. It is a process of continual arrival.

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One suggestion oft-offered to writers in search of their "voice," especially those who produce prose that tries too hard or unintentionally comes off as pretentious, is to "write like you talk." Write like you were talking to a smart person across the table from you at dinner. I was intrigued, then, to see this snippet in Benjamin Kunkel's appreciation of David Foster Wallace:

Speaking for myself, I realized, while writing my first novel, that relaxed diction could be a tremendous strain and artifice. Afterwards I understood that I wrote more naturally and honestly when more formally.

That writing formally could be more natural is somewhat counter to conventional wisdom. Regardless of what's natural, it's definitely the case that writing like you talk — writing informally, writing conversationally — is much harder than writing formally. (That's why hacks like me tend to veer formal.) As Jesse put it to me, real life conversation contains banalities and tics that are annoying when in print, so the informal writer must eliminate those without eliminating the charm and accessibility he sought in the first place.

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From the Galassi interview, there's this wisdom:

Most words put down on paper are not interesting, or don't make sense, or are stilted. You can tell within two pages that something is not going to work….Only a few people in the world are meant to be writers.

The idea is that the people who should write are the people who can't not write. I think there are a lot of people who want to write, and who want to say something, but a lot of them don't have anything to say.

The "can't not do X" is a good formulation for most people who excel at their work. Orhan Pamuk sounded a similar note on why he writes.

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Here are five writing exercises, via Menand:

  • Take a simple event: A man gets off a bus, trips, looks around in embarrassment, and sees a woman smiling. . . . Describe this event, using the same characters and elements of setting, in five completely different ways.
  • Describe a lake as seen by a young man who has just committed murder. Do not mention the murder.
  • Describe a landscape as seen by a bird. Do not mention the bird.
  • Using all you know, write a short story about an animal—for instance, a cow.

Six Strategies for Overcoming “Chicken and Egg” Problems

Chris Dixon has a great post up about the "chicken and the egg" problem, which refers to the challenge of achieving critical mass in a market where the network effects are strong. The telephone is the classic example — it's only valuable if other people also have one, and becomes more valuable the more people who use it. So how do you convince the first few people to adopt the technology? Here are his six strategies:

1. Signal long-term commitment to platform success and competitive pricing.   When Microsoft launched the original Xbox,  they made a big deal of publicly committing to spending $500M promoting the platform, thereby signalling that they were fully committed for the long haul and giving comfort to 3rd party game developers.   Another way to give comfort that your platform isn’t going away is to open source it – this way third parties know that even if the company stops supporting the product, independent developers can continue to do so (e.g. Google Android and Chrome).  Open sourcing also gives comfort that the company isn’t going to raise prices once they’ve reached critical mass.

2. Use backwards and sideways compatibility to benefit from existing complements. Microsoft of course has used backward compatibility very successfully for decades with DOS and then Windows, as have many game console makers.  In our paper we argue that the successful early bill pay (”bill presentment”) companies provided backward compatibility by sending snail mail checks to merchants who had yet to sign on to their electronic platform.

Virtual machines and Bootcamp gave Apple’s hardware some sideways compatibility with Windows.  Sun’s invention of Java could be seen as an attempt to introduce sideways compatibility between its shrinking server market and its competitors (Windows, Linux) by introducing a new, cross-platform programming layer.

3. Exploit irregular network topologies. In the last 90s, most people assumed that dating websites was a “winner take all market” and Match.com had won it, until a swath of niche competitors arose (e.g. Jdate) that succeeded because certain groups of people tend to date others from that same group.  Real-life networks are often very different from the idealized, uniformly distributed networks pictured in economics textbooks.  Facebook exploited the fact that social connections are highly clustered at colleges as a “beachhead” to challenge much bigger incumbents (Friendster).  By finding clusters in the network smaller companies can reach critical mass within those sub-clusters and then expand beyond.

4. Influence the firms that produce vital complements.  Sony and Philips, the companies that oversaw the successful launch of the compact disc technology in the early 1980’s, followed the CD launch with the introduction of the digital audiotape (DAT) in 1987. The DAT offered CD sound quality and, in a significant improvement over CD technology, it also offered the ability to record music.  Despite these improvements, the DAT never gained significant consumer adoption and ended as an embarrassing failure for Sony and Philips.  DAT failed because Sony and Philips failed to reassure record companies who were concerned that the recording capabilities of DAT would lead to widespread piracy.  Sony finally reached an anti-piracy agreement with record companies in 1992, but by that time consumer expectations for the DAT platform were dampened sufficiently to doom the platform.

On the other hand, when Sony and Philips launched the CD, they succeeded because they did a significantly better job influencing complement producers. Most importantly, they addressed the record companies’ primary concern by making CDs piracy resistant (or so it seemed at the time). In addition, Philips was able to influence Polygram, a major record label, to release music in the CD format because Philips owned a 50 percent stake in Polygram. Finally, Sony and Philips provided the record companies with access to their manufacturing technology and plant in order to ensure an adequate supply of complementary products. As a result, nearly 650 music titles were available in CD format when the first CD players were released and the CD format went on to become the most popular music format.

5. Provide standalone value for the base product.  Philips introduced the videodisc player (VDP) in 1979 as a competitor to the VCR. VDPs had slightly better picture quality than VCRs and had potentially lower hardware and software costs, owing to a simpler manufacturing process. However, the VCR had a 3-4 year head start on the VDP and had already developed an installed base of over one million units.

Providing a stand-alone use is the strategy that VCR producers used to achieve a successful launch and avoid fighting the difficult chicken and egg startup problem. Unlike the VDP, the VCR offered the ability to time-shift television programming. In fact, when the VCR was launched this was the only application available because the market for pre-recorded videocassettes had not yet developed. The standalone value for the VCR “time-shifting television programming” was sufficiently strong to get over a million people to purchase the product in the first 3-4 years after its launch. This installed user base of the VCR as a base product was sufficient to entice entrepreneurs to develop a market for pre-recorded videocassettes as complementary products in the late 1970’s. The complement-based network effect that resulted improved the value of the base product, increased sales velocity for the base and complementary products, and ensured that the VCR would be a common feature in most American homes.

A good modern example of this would be del.icio.us, which had stand alone value by storing your bookmarks in the cloud, and also had network effects with its social features.

6. Integrate vertically into critical complements when supply is not certain.  To overcome the chicken and egg problem, companies must find a way to ensure an adequate supply, variety, and quality of complementary goods. By vertically integrating into the complement product as well as the base product, a company can attempt to ensure an adequate supply of both goods.  Nintendo is the leading developer of games for its consoles, and Microsoft and Sony fund many of their most popular games.

Vertical integration is risky – as witnessed by the Apple computer in the late 80s and early 90s. By remaining tightly integrated, Apple precluded market competition from providing the necessary variety of price-competitive complements and base products.

Book Notes: Walden by Thoreau

To continue my transcendentalist kick (here are my notes on Emerson), I read Henry David Thoreau’s Walden. It was enjoyable.

I recently shed the spiritual but not religious label, but I’m still intrigued by the idea of spirituality, in particular those kinetic experiences in nature for which “spiritual,” despite its ambiguity, seems the most apt description.

Thoreau is all about nature, and would well approve, I think, of the post-college rite of wandering the earth in search of its earthly wisdom. Walden has some eloquent sentences and provocative nuggets. Its themes are nature, simple living, contemplation, and solitude. I skipped many sections, such as his meticulous documenting of cabin life, but I would still recommend it on the whole.

My favorite sentences / nuggets, direct quotes, are below:

  • I, on my side, require of every writer, first or last, a simple and sincere account of his own life, and not merely what he has heard of other men’s lives; some such account as he would send to his kindred from a distant land; for if he has lived sincerely, it must have been in a distant land to me.
  • It is hard to have a Southern overseer; it is worse to have a Northern one; but worst of all when you are the slave-driver of yourself.
  • But it is a characteristic of wisdom not to do desperate things.
  • Confucius said, “To know that we know what we know, and that we do not know what we do not know, that is true knowledge.”
  • In the long run men hit only what they aim at. Therefore, though they should fail immediately, they had better aim at something high.
  • for a man is rich in proportion to the number of things which he can afford to let alone.
  • The Harivansa says, “An abode without birds is like a meat without seasoning.”
  • What should we think of the shepherd’s life if his flocks always wandered to higher pastures than his thoughts?
  • The millions are awake enough for physical labor; but only one in a million is awake enough for effective intellectual exertion, only one in a hundred millions to a poetic or divine life. To be awake is to be alive. I have never yet met a man who was quite awake. How could I have looked him in the face?
  • I wanted to live deep and suck out all the marrow of life, to live so sturdily and Spartan-like as to put to rout all that was not life, to cut a broad swath and shave close, to drive life into a corner, and reduce it to its lowest terms, and, if it proved to be mean, why then to get the whole and genuine meanness of it, and publish its meanness to the world; or if it were sublime, to know it by experience, and be able to give a true account of it in my next excursion.
  • Be it life or death, we crave only reality. If we are really dying, let us hear the rattle in our throats and feel cold in the extremities; if we are alive, let us go about our business.
  • I have always been regretting that I was not as wise as the day I was born. The intellect is a cleaver; it discerns and rifts its way into the secret of things. I do not wish to be any more busy with my hands than is necessary. My head is hands and feet. I feel all my best faculties concentrated in it. My instinct tells me that my head is an organ for burrowing, as some creatures use their snout and fore paws, and with it I would mine and burrow my way through these hills. I think that the richest vein is somewhere hereabouts; so by the divining-rod and thin rising vapors I judge; and here I will begin to mine.
  • I confess I do not make any very broad distinction between the illiterateness of my townsman who cannot read at all and the illiterateness of him who has learned to read only what is for children and feeble intellects.
  • It is as much Asia or Africa as New England. I have, as it were, my own sun and moon and stars, and a little world all to myself.
  • Confucius says truly, “Virtue does not remain as an abandoned orphan; it must of necessity have neighbors.”
  • I find it wholesome to be alone the greater part of the time. To be in company, even with the best, is soon wearisome and dissipating. I love to be alone. I never found the companion that was so companionable as solitude.
  • We meet at very short intervals, not having had time to acquire any new value for each other. We meet at meals three times a day, and give each other a new taste of that old musty cheese that we are. We have had to agree on a certain set of rules, called etiquette and politeness, to make this frequent meeting tolerable and that we need not come to open war.
  • They had nothing to eat themselves, and they were wiser than to think that apologies could supply the place of food to their guests; so they drew their belts tighter and said nothing about it.

The Scale of China

It’s really, really hard to convey the scale of China. My usual strategy is to talk about the number of cities that have, say, over 10 million people in them, or whatever.

Here’s one fun fact we learned the other day: the best hospitals in China have on average daily outpatient numbers of 10,000 people. 10,000 outpatients every day. The biggest hospital in the world is in China: 5,000 beds.

Also, there are 470 million pigs alive in China right now.

Sanitation and Health in China

The country is going bizerke over Swine flu. But there are so many things that could be done to improve sanitation and health in the country….instead they’re installing more temperature-reading devices at the airport.

Hand soap in bathrooms are rare. Paper towels are even rarer — the drying device of choice is the hot air blower. These, of course, almost never get the job done, so people are disinclined to want to wash their hands in the first place.

Then there’s food cleanliness — in particular cleanliness of plates and dishes and tables. This is an area of weakness all over the third world.

The Secular Church

After channeling Jonathan Haidt in a post titled "Why Moral People Vote Republican," Chris Yeh re-surfaces our idea of creating a secular church:

…Democrats appeal strictly to adherents of a Millian view, while leaving Durkheimians with the impression that they ignore the majority of what makes a society moral.

This ties in neatly with some of the thoughts Ben Casnocha and I have had about the secular church; specifically, that secular humanism needs a stronger foundation for expressions of self-control, duty, and loyalty than the small beer of lengthy philosophical discussion. Indeed, were the Democrats wise, they would try to create the equivalent of a secular church based on American patriotism, this providing themselves with both a moral foundation and the means to dispute the Republican monopoly on flag-waving.

Of course, the most important feature of our secular church will be adequate leg room in the pews.