Quote of the week:

“The only thing that will redeem mankind is cooperation.” — Bertrand Russell

Good ideas flourish through consistent trial and error—especially error

In a recent post, the investor Kevin Stevens of Energize Capital explores a simple but enduring concept: the seeds of innovation are always rooted in experimentation. Experiments, however, often fail. And that’s the point. Organizations and individuals who embrace this dynamic create a framework for growth—and long-term survival. 

“It’s common, especially at the later stages, to get into a similar struggle where everything must be perfect for executing a new strategy or customer segment,” Kevin writes. “But there’s a lot to be said for simply building the habit of trying new things and experimenting regularly. Amazon famously encourages this, and it’s worked out well; for every Fire phone, there’s an AWS or Prime.” He continues:

“The most important thing with any habit or company ethos is to put yourself in a position to succeed. To do that, you have to practice regularly and enjoy the actual practice. We often get caught up in making things too perfect, so things don’t get done. Instead, put yourself in a position to succeed. Build a process you enjoy, and don’t let perfection be the enemy of the done.”


Video games are booming. So why isn’t revenue growing? 

Matthew Ball explores a fascinating dichotomy in a recent essay on the video game industry: there are more players and games than ever before, but revenue is flatlining. Why is that? Ball channels a huge amount of research into a compelling narrative about the state of gaming from the perspective of hardware manufacturers, game developers, and outside investors. “Gaming’s struggles likely stem from the often-ignored downsides of Metcalfe’s law,” he writes. “Gaming’s particularly powerful network effects mean that even marginal increases in the number of players can strongly impact all players’ playtime and spend.” He continues:

“Put another way, if three of your friends play Call of Duty or Fortnite, not two, it’s far more likely you’ll play more often and for longer periods. The more people you play with, the greater the benefit from buying cosmetic items, too. However, Metcalfe’s law works in reverse, too — if a few friends stop playing or play less, you’ll probably play and spend less too.”

A few more links I enjoyed: 

“When you don’t watch the market every day, you can finally see with unquestionable clarity that what you would have expected to happen didn’t. The unexpected did. Had you told me war would break out in the Middle East in October and last for months, I would have been sad but unsurprised. Had you added that crude oil would—after a fleeting surge—finish 2023 at a lower price than the day I left, I would have been amazed.”
“Joel Tillinghast’s negative checklist inverts the problem. Instead of looking for great companies, great management, and so on, the checklist avoids the worst of the worst of them. Don’t understand the company? Skip it. Horrible management? Nope. Overpriced stock with no sales? Pass. Product with no pricing power or brand loyalty? Not interested.”
“The foundations of China’s success in EVs were built a decade ago, when the state decided to bet on batteries, and then bought up a lot of the mines for these metals. Though the present-day economic trajectory is much uncertain, we’re still going to see technology achievements that result from decisions made years ago. The state continues to throw reams of scientists and engineers to work out its strategic deficiencies. Though companies are relocating production to India and Vietnam, China is going to remain the world’s largest manufacturer for many more years to come. That means its manufacturing ecosystems will still produce a technological momentum of their own.”

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