Bad Blood: Secrets and Lies in a Silicon Valley Startup – John Carreyrou

I love to read, and I mostly read books on investing and anything subject that would help me to be a better investor. As a result, non-fiction books dominate. As a luxury, I do read autobiographies and try to transport myself into those moments where the subject would have experience living their inspiring lives.

My work also requires me to travel which results in a lot of time waiting at the airport, long journeys in public transport and downtime on the plane. This is when I pick books which I may otherwise not have picked up. On my recent week-long trip to Vienna to attend a conference I bought Bad Blood: Secrets and Lies in a Silicon Valley Startup by John Carreyrou. And boy oh boy it did not disappoint.

Being a phlebotomist early in my life and having worked in a diagnostic lab the industry, its practices and the science behind this book were natural to me. I have lived the life of a technician. And could relate to the problematic ethical point of view the whistleblowers would have experienced.

John does an excellent job to paint a vivid picture. Theranos was nothing but a sham. In hindsight, everything is evident. What Elizabeth Holmes (EH) wanted to achieve would have made patients lives easier no doubt about it. The principle was ambitious and also defied physics. It is the second part which the Theranos could not bend. Everything else was easy to bend and that it what happened.

What surprises me is how the stalwarts like Geroge Schultz, Richard Kovacevich, James Mattis and an industry veteran former VP on Amgen Fabrizio Bonanni failed to spot the fundamental flaws in the technology itself.  Numerous project delays, willy-washy promises and excuses should have got these people to dig further, and none did!

Influential people yielded their power to protect EH rather than the common man or common sense. Everyone was smitten by EH and her charisma! Can we define a pathological liar’s ability to manipulate people as charisma? Who knows.  🤥😤

It is the determination of the author, the Wall Street Journal’s wider team and of course the whistleblowers who with their sheer will brought this fraud into the light.

I can only imagine how John would have felt when he was met with resistance at every point of his investigative journey to get this story published. At the end the investors lost money, the culprits paid a little price for their crimes, but the truth prevailed.

Thinking in Bets – Annie Duke

As an individual, I believe a lot in processes. If you have a process and you are disciplined, the outcomes should be in your favour. Not all the time, but most of the times.

As a student of investing, I wanted to make the decision-making process robust. I also know that outcomes are beyond one’s control. Control what you can control, the central tenet of Stoic philosophy.

Annie Duke does a great job to explore the topic of seeing this in terms of the probabilistic way instead of a 0 or 100% certainty. Maybe it is our fundamental flaw that we need a sense of certainty to feel in control, but the reality is very different. Nothing is guaranteed, except death and taxes may be? 😬

Thinking in Bets guides you through the process of assigning probabilities to the possible outcomes and being comfortable in the fact that you do not know anything for sure. Annie tells an incredible story, and the book reads well.

My gauge of a good book is one where I do not want to keep it down. I want to pick it up the moment I get up, and I want to keep reading until I want to go to sleep. And this book does not disappoint.

Learning and highlights

▶ Life is Poker, not Chess

 

▶ Treating decisions as bets help to avoid decision traps and inaction

 

▶Thinking in bets allows you to move towards objectivity and accuracy and being open-minded

 

▶A good quality decision can still deliver a non-favourable outcome, and it happens all the time, and it is OK 😇

Example when you need to focus on people and not the process

A dear friend of mine gets a call tell him his mother is no more! A shocking call to receive for anyone. Inevitable but nothing prepares us for it.

A couple of days later, he’s booking tickets to fly to his home town in another continent. I spend an inordinate amount of time with this man, so as usual, we are on a call discussing how he is feeling. We talk everything under the sun almost daily.

It hits me; my friend is booking annual leave to attend his mother’s funeral! I ask him to request leave under the bereavement policy.

He didn’t think about it. I am not surprised, as this should not be on his priority list. That is why you have a wingman. My nudge saves him three days of annual leave.

The next 30 minutes are spent on finding the right form to fill to apply for Bereavement Leave!

Seriously? A form? Think about it. Bereavement itself is a rare occurrence — a time of emotional swings. You are sad, upset. You have just lost someone dear. And the last thing people want to do is follow a process!

It is a prime example when the process should be as simple as it can be, a step or two at the max! The process could be a generic HR email ID and a one-liner saying I need to take bereavement leave. No questions ask. That should be it! Or the line manager should be able to liaise on the employee’s behalf.

Expecting to find a form, fill it during such a sensitive time defies logic and also shows how bad we are at second-order thinking – what are the consequences of the action. I understand people need to follow a process, fill a form for traceability/audit purposes but not during the time of emotional turmoil and emergencies. During these instances, people should always, ALWAYS trump over the process and compliance. Compassion should win over compliance.

There are 3 Ps any company needs to focus on – People, Purpose, Passion (profit is always a consequence of taking care of these 3Ps).

Moonshot – Wrisk

We have a lift out of our moonshots — first investment in an insurance start-up.

The thesis is simple. The insurance industry is opaque. You feed your details, and you get a price to insure your stuff. Wrisk wants to bring transparency where you know why your insurance premium is what it is. It is an app based offering with a rich technology stack. Aims are to launch this globally. Revenue is via commissions offered on policies sold.

Vishal Khandelwal is one of my favourite thinkers out there. A sensible guy who is a devout investor.

Crowd sourcing images

On my flight back from Lyon I spot this advert. The image appears to be crowdsourced and also the photographer is credited as well.

I believe this is the right way forward for any brand that wants to connect with its audience. It creates user-generated images which adds life to what would otherwise be staged by professionals. The rewards can be flexible for the creators and at the same time the brand engagement goes up as well.

DNA and Coffeehouse

As a student of Molecular Biology, the nature of molecules and how they function within our body has always fascinated me. A central molecule that one studies is DNA. How the DNA is synthesised, to how it replicates, how does it create the RNA messages needed for protein synthesis, etc.

The discovery of the structure of DNA was central to our understanding. The popular culture credits James Watson and Francis Crick for the double helix structure of the DNA. Two others played an important role, Maurice Wilkins and Rosalind Franklin.  According to me, it was Rosalind who is the unsung hero. Maurice did win the Nobel Price with the Watson and Crick for the discovery of the nucleic acid structure.

My belief, along with the peers of Rosalind is she was a genius scientist, but as she was a woman, men would have been intimidated by her sheer brilliance. Also, four people sharing the price would have been too crowded. Who knows?

I always felt, women have drawn the short straw and have been lost in the background whereas men hogged the limelight. I feel ashamed the scientific field of discovery suffered the syndrome too.

Interesting though is how the story appears in the book Where Good Ideas Come From. Maybe it was just the Rosalind did not spend too much time in the coffeehouse. Below is the section of the books which talks about why Watson and Crick were able to jump through the conventions of the time and make a leap into the what now appears obvious.


The model of weak-tie exaptation also helps us understand the classic story of twentieth-century scientific epiphany: Watson and Crick’s discovery of the double-helix structure of DNA. As Ogle and others have noted, in the small scientific community working on the problem of DNA in the early 1950s, the person who had the clearest and most direct view of the molecule itself was neither James Watson nor Francis Crick. It was, instead, a biophysicist at London University named Rosalind Franklin, who was using state-of-the-art X-ray crystallography to study the mysterious strands of DNA.

But Franklin’s vision was limited by two factors. First, there was the imperfect state of the X-ray technology, which only gave her hints about the helix structure and base-pair symmetry. But Franklin was also limited by the conceptual island on which she based her work. Her approach was purely inductive: master the X-ray technology and then use the information collected to build a model of DNA. (“We’re going to let the data tell us the structure,” she famously told Crick.)

But to “see” the double-helix in the early 1950s took something more than just analyzing it in an X-ray machine. To solve the mystery, Watson and Crick had to piece it together with tools drawn from multiple disciplines: biochemistry, genetics, information theory, and mathematics, not to mention Franklin’s X-ray images. Even Crick’s sculpture metaphor proved crucial to cracking the code.

Next to Franklin, Watson and Crick seemed almost dilettantes and dabblers: Crick had switched from physics to biology in his graduate years; neither had a comprehensive grasp of biochemistry. But DNA was not a problem that could be solved within a single discipline. Watson and Crick had to borrow from other domains to make sense of the molecule. As Ogle puts it, “Once key ideas from idea-spaces that otherwise had little contact with one another were connected, they began, quasi-autonomously, to make new sense in terms of one another, leading to the emergence of a whole that was more than the sum of its parts.”

It is a fitting footnote to the story that Watson and Crick were notorious for taking long, rambling coffee breaks, where they tossed around ideas in a more playful setting outside the lab—a practice that was generally scorned by their more fastidious colleagues. With their weak-tie connections to disparate fields, and their exaptative intelligence, Watson and Crick worked their way to a Nobel Prize in their own private coffeehouse.

 

Source – Johnson, Steven. Where Good Ideas Come From (pp. 168-169). Penguin Books Ltd. Kindle Edition.

Growing the Pie – Howard Marks – Q1 2019

Howard Marks letter every quarter is something that I eagerly look forward to. Q1 2019 letter can be found by clicking here.

My favourite excerpts are below

On the ability of the populism to stir people;

Sound bites like these find receptive audeinces amonth people who are unhappy with their lot, whereas detecting the error in these statements requires an insight, sense of history and understanding of economics that many people lack.

Winston Churchill’s quote of capitalism and socialism;

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virture of socialism is the eual sharing of miseries.

Summarising China’s agricultural history from a paper published in the Journal of International Affairs in 1986;

You can’t have it all. Most people lived much better because of the reforms, whereas under the prior system everyone had it the same, but most people lived far less well. Which is fairer?

Captialsims doesn’t know about or care about fairness in the sense of equal sharing. What it considers fair is the proposition that people who have greater ability or work harder should be able to earn more. That potential, it says, provides incentives for hard work and rewards those who achieve, ultimately resulting in a better life for almost everyone.

QWERTY works.

The debate is not whether QWERTY keyboard is better layout or not. The reality is most of us use that layout on our phones, laptops and desktops.

The non-standard keyboard layout creates a poor user experience and can result in long queues during busy periods.

So why should a parking meter be different?

The above parking meter needs you to put your car registration number before you proceed to enter the number of hours to pay the fee.

There is no rhyme or reason to have this odd keyboard layout and to catch people out.

This not only ruins the overall user experience, but people also become irritated, and the queues build up.

When there is an existing system that works unless the cost to benefit ratio exceeds there is no point breaking the routine.

The product manager for these machines should have known better and just gone with a QWERTY keyboard.

It is easy to complicate things but difficult to keep things simple.