Network Effects and Virality are not the same – Re: Platforms

I’m reading the book Platform Revolution to better understand how platforms change markets. For the longest time, I thought that network effects and virality were the same thing. However, according to the authors:

“Virality is about attracting people who are off the platform and enticing them to join it, while network effects are about increasing value among people on-platform.” (23)

Photo by JJ Ying on Unsplash
Listen to this blog post here! Network Effects and Virality

I had assumed that what attracts people into a network is the value they get from the network. But in fact, this oversimplifies the interaction between user and platform. The reason for joining could be the same as sticking around. But often, it isn’t.

Suppose a marketing initiative gives users $10 to refer a friend to join. Or, registering could require the user to input their contact list to the platform, to be used for more invites. These examples show virality to grow a network, but not value creation within a network. Just because a platform has a network and goes viral, does not mean that it adds value to users upon joining. Virality used to get more hype, with value coming from how fast you could grow. But now, the value of platforms comes from how they retain users just as much as obtaining users.

Network effects depend a lot on the platform itself. For YouTube, virality could be sharing a video link. But network effect benefits would be the improvement to the video recommendation algorithm coming from more behavioral data from more users. This recommendation keeps users coming back.

It’s possible that a platform has both virality and network effects, such as Facebook: people joined Facebook because of the viral effect of “Fear of Missing Out.” Our friends were connected, so we wanted in as well. Once online, people stayed on for additional features like Facebook Groups and Facebook Marketplace, which grew more valuable as more people joined. Now, the long-term value of Facebook is “active” users, not just “new” users. And activity comes from those valuing the service and going back for the network effects.

As I continue learning about platforms, I’ll pay more attention to the difference between why to join a network vs. why to stay on it.

Educating the city of the soul – reflections on The Republic by Plato (translated Grube + Reeve) – OGB #7

Plato outlines significant ideas in his well-known work, The Republic. He writes how Socrates, the protagonist, uses the metaphor of a city to summarize the parts of the individual soul. Socrates focuses heavily on education as the way to nurture the parts of the city, and thus the soul. What does education teach us?

You can listen to this post here!

First, Socrates separates the soul into three parts: 1. wisdom, 2. courage, and 3. desire. To better understand these soul parts, consider how we would build a city. At the bottom of the social hierarchy in our city are the craftsmen. They work at individual tasks to survive and follow their desires toward luxuries. In the middle are the auxiliaries, who redirect their spirit into arts that guide those desires of the craftsmen. At the top are guardians who rely on calculation and discipline to lead the rest of the people. They fight against external enemies and quell internal rebellions. A good and just city, and thus a soul, emerges when rational wisdom rules over the spirited courage and desire. Each keeps to its own type and task.

The education that the city and soul need includes music, poetry, and physical training. These activities create harmony between the rational part and the spirited part. Music and poetry nurture wisdom with “fine words and learning” and relaxes the spirit “through soothing stories.” And physical training makes both parts gentle through “harmony and rhythm.” (442a)

The result of this nurturing, soothing, and relaxing is that both soul parts learn their own role better. The rational part governs the appetitive part better, making sure desire doesn’t become too strong.

So, music, poetry, and physical training make the individual part become more into itself. Is this because this education contains the answers on how to become a more complete self? Or, because this education relaxes us into reassurance that leads us to self-knowledge? It could be a bit of both.

In my own life, I can think of songs that lead me to something new by weaving a story and teaching me new ways of thinking. But, I can also think of exercise that yanks my best effort out of myself, teaching me something new about my ability.

I’ll have to wait and read the remaining books of The Republic to find out what Plato says about this.

The four people riding with us on this Gamestop rollercoaster

There’s something happening in the markets.

Note: these are my views and not anyone else’s: not my employer nor future employers nor past employers nor anyone else other than myself. And these names are made-up.

Click here to listen to this post!

We are in the middle of something big. There’s been a lot of volatility around Gamestop and other stocks. Sometime soon, movies and blog posts and open letters will emerge summarizing this cultural movement and institutional reactions and the yet unknown end result.

We’re all struggling to explain it. But maybe we just need to not jump to conclusions too quickly. Pay attention to the details. What are the human ambitions behind each action? What connections are bursting at the seams- indicating their fragility to begin with? As we spiral down Poe’s maelstrom, let’s ride it out together and pick the most important things to carry forward and what to leave behind.

I grouped some reactions from the public into a few types for fun.

Today in the market we have:

  1. Rip-it Rocky
  2. Break-it Brad
  3. New-world Ned
  4. Cautious Cameron
Photo by Matt Bowden on Unsplash
  1. Rip-it Rocky: “I fucking love it.” Let’s stick it to the billionaires who do this every day. I’m YOLOing it all. I’m aping it to the moon for my bananas and tendies. This is the first real opportunity to beat the house that always wins. Props to the heroes who donated to charity, bought their parents a home, and paid off student debt. Let’s ride the wave, pump the dip, dump the rip.
  2. Break-it Brad: “They deserve it.” This is a ground-breaking momentum change in our markets, and there’s no going back. The financial and government world were too slow to react, and now the retail investor has broken the system. Already, we’ve seen hedge funds lose significant capital. Institutional investors are running scared. And they should be, because they’ve been able to game the system unhindered for a long time. And now when the tables have turned against them, now they want to change the rules? No way. This is going to be a complete catastrophe for the markets. And it’s about time. It’s time to move forward toward regulation for big investors and decentralization of financial institutions.
  3. New-world Ned: “It’s odd that this hasn’t happened before.” This seems like the first time that retail investors have banded together with so much volume and focus. No longer do fundamentals play a role in the valuation of stocks. In this new environment, the dynamics have changed. The fact that a stock is overly shorted could be the reason to run up the value. Or, some other reason could cause people to buy. With endless information at their disposal, the smartest retail investors predicted the rally. With lightning-fast communication over the internet, investors grouped around a common purpose and became powerful. Now, who can predict the next time this could happen. The group may appear in a different place with a different focus. It seems that big investors can be outsmarted by non-big investors. They’ll need to respect this risk much more now.
  4. Cautious Cameron: “I’m worried about the bubble bursting.” Desperate retail investors are the most at-risk to put more money in than they can afford to lose. Hawkish investors will take advantage of them like prey. And the desperate investor will lose. I’m afraid for my family and friends who bought GME stock just because there was a speculative run-up on the value. The stock price is bound to go back down because the inherent value of Gamestop hasn’t changed even thought the stock price has. As a result of this, there will be loss. And there will be regulation, but I’m not sure that will accomplish anything about what people are looking for since there are already many regulations in place. If anything, we need to prevent this bubble from happening again and affecting so many unknowing people.

We’ve seen holders holding and buyers buying and sellers selling. Who knows what the price of GME will be in two weeks. And who knows what we’ll be talking about then.

One thing is clear: no one can predict what happens next.

Compliment More: September, 2018 Level-Up

The next installment of my monthly level-up series is saying more compliments to friends. In the fall, 2018, I was moving from D.C. to Minneapolis and starting a new job. Life changes like that lead to reflection about what we value. We decide what we want to take with us in the next step of our journey. In this case, I wanted to take my friends and the relationships I had built during the previous few years.

One way to build up friendship is to make others feel better when being with you: for example, giving reassurance and compliments.

Usually, I would compliment someone in a reactionary way. I would notice something different and point it out. Or, I would give a compliment in return for receiving one. But then I tried something new and proactive.

Photo by Wil Stewart on Unsplash

I gave compliments by sharing my gratitude: thankfulness toward a shared connection, appreciation for their support, and gratefulness for being a part of my life. It was helpful on phone calls, since phone calls are ways of catching up, not shared experiences. It’s way easier to compliment someone in person or by sharing an experience: “hey you danced well” or “good job crushing those noobs”. But over the phone, I didn’t have those things. Instead, I focused on gratitude for their pure existence.

As a result, I noticed myself thinking harder about why I’m grateful for specific friendships. Genuine caring drove me to enjoy giving compliments. I didn’t do it out of obligation. I felt more motivated to spend time with the people for which I’m grateful. And the little extra effort wasn’t too difficult after some practice. I explained my motivation for continuing to connect with that person. That way, the compliment is genuine, transparent, and positive.

I kept up this improvement for about a month. Then I tapered off. But I still come back to gratitude in my friendships. I now think more actively about how much appreciate people in my life. And for you, dear reader, I learned that a little compliment can move others into hope and joy. I’m grateful for your attention!

Dropping the unnecessary stuff.

As a culture, sometimes we drop words at the start of sentences.

For example: instead of saying “I have a friendly announcement that…,” we say “Friendly announcement that…”

And, instead of saying “I’d be happy to do that,” we say “Happy to do that.”

Wonder why we do that? Interested to find out. Quicker to get to the point. Confused or make sense?

Photo by Erol Ahmed on Unsplash

What do we do with our stuff?

Losing a loved one is hard. Afterwards, the family must go through all their stuff. They choose whether to keep something or let it go. Where does the value of a material possession come from?

Photo by Annie Spratt on Unsplash

When I faced this issue, I realized that I have to distinguish an item’s unique connection to its owner in addition to utility.

UsefulNot Useful
UniqueAB
GenericCD
The Value / Uniqueness Matrix

D: Generic Stuff that is not useful, like birdseed or towels: Ditch or donate.

C: Generic Stuff that is useful, like leftover food in the pantry: Keep it if I can, but these are replaceable.

B: Unique Stuff that is not useful, like some antique china: Important and valuable to someone else, so give it to that someone who will value it.

A: Unique Stuff is useful, like special mugs: Keep this and cherish the memories.

In both cases, anything with a unique connection to me could provide others with value. Whereas something generic could be useful or could not be. Maybe the true value in possessions comes not in its utility, but in its unique connection to the owner. This value comes from the sentiment and memories that the item provides.


Differentiating items into these buckets helps with moving on.

It also reverses the spotlight on ourselves. What would happen if we looked at our own material possessions with the same level of scrutiny? Because if I don’t, then eventually my loved ones will.

I accumulate stuff that is useful to me. I’m not worried about that.

But what stuff of mine is unique to me versus generic? I’ll think twice next time. I won’t overvalue those generic, replaceable things. Rather, I will protect only those unique items that will provide loved ones with more lasting sentimental, memorial value.

Three Life Lessons From: My second job

My next gig was one-year as a software analyst on a small team for a federal contractor. This was my “big step” job because I finally broke into the IT industry. I knew software was eating the world and I wanted a place at the table.

The differentiator in the hiring process was not my computer science experience. That’s good, because I barely made it through Computer Science 101. Rather, the key was my major in Philosophy, because one huge task would be teaching users how to use our software. My manager thought my communication skills would be a good fit. I am grateful for her trust!

Photo by Christina @ wocintechchat.com on Unsplash
  1. I learned what Software-as-a-Service is (SaaS). There are products and services, which are typically viewed separately. However when a software product and corresponding customer support enables a process to happen, the result is SaaS, encompassing the product and services that makes the process happen. This was important to understand because most IT companies seem to be SaaS companies.
  2. I learned about the Software Development Lifecycle (SDLC). I learned how software goes through a process of creation, from problem to design to requirements to development to testing to delivery to support to training, and repeat. Typically this process happened one at a time as a Waterfall, but the new Agile methodology smushed everything together, reducing scope, time, and cost to bite-sized chunks. Even if I’m in Sales, now I know what I’m selling: not a static widget, but a growing widget.
  3. I learned about the differences in style and work-life balance of other team members. Some people go hard 25 hours a day. Some people clock out at 5pm to spend time on things outside of work. Then there are many people in the middle. I learned that every style is ok, and that the job of a manager is to ensure that a team can operate well together even with all these differences. I also learned that my own style does not work for everyone else just because it’s my style.

These lessons have helped me to develop my career and dive deeper into software advisory projects and teams.

The new school model: Learn-Streaming in three steps

Live-streaming is a growing pastime of all generations. It launched with video-games on Twitch, but now there are livestreams of any activity like ballot-counting or night sky-gazing.

This new medium gives rise to a possibly new and better learning model, which could be called “Learn-Streaming.”

  1. Livestream my learning
  2. Teach someone else what I learned
  3. Condense the results into a short summary
  1. Learn by myself while live streaming my progress and talking to the community to learn the new thing. This could be a video game, mathematics, cooking, anything.
  2. Call on a lucky community member and teach them my learnings while live streaming this progress to get live feedback. Teaching something is the best way to learn it.
  3. Number three. Create a concise, refined summary of my learnings in the form of a short video or blog post for others.

The old learning model skips to #2 or even #3.

With the new learning model, we can watch the progress of people striving to gain mastery in real-time. We can see how long it takes to do step #1 and how many mistakes that amateurs make to become masters. Instead of splicing the movie montage in between the entertaining bits, we can now see the blood, sweat, and tears from hard work.

This process ultimately benefits others who struggle with failure in step #1. It reassures those who need more patience to learn slowly and foolishly. Slowly and foolishly is how to learn. There is no skipping of steps #1 and #2.

All credit to FollowGrubby via Youtube Channel

FollowGrubby (Grubby) is a Dutch gamer who made it big while playing Warcraft III. Now, his occupation is live-streaming video games for hundreds of thousands of followers and millions of views while receiving donations and subscriptions. He serves as a great example of the learning model. Imagine you want to become a better Warcraft III player. I’d recommend to Grubby for three types of content:

  1. Livestreams of his video games, testing, and practice on Twitch. He watches a replay after every game, analyzing his mistakes and improving.
  2. Long recording of the livestream of teaching the basics (2 hours).
  3. Short, sweet, quick videos showing the results of all the learnings (20 minutes).

How far to follow your passion

Many people say to follow your passion. But how far?

I don’t think everyone is meant to follow their passion to its conclusion. Instead, we often need to do things that we don’t enjoy or that wouldn’t be our first choice. I don’t think anyone sets out to try to clean toilets as their primary job.

But that’s ok! Because you can use your passions creatively in many types of work. And these skills can be invaluable in that other line of work.

Photo by Kael Bloom on Unsplash

For example, I love coaching. But my job title does not say
“coach.” Instead, I use coaching methods in my work. I market myself as a software consultant and account manager with coaching skills. As a result, this coaching makes our team more effective.

I also enjoy music. But I don’t make my primary occupation about creating or listening to music. Instead, I do employ artistic methods in my work.

For example, in a proposal, I include musical elements in the structure to make it flow. Similar to a song, the presentation builds with verses as supporting evidence into a repeating chorus as the main argument. These ideas work in harmony, just like in music.

So, if you like coaching or music, you can pursue those as primary passions. But remember that these skills are invaluable in other areas of work that you wouldn’t think of!

Many Ways to Love, but Only One Right Way – The Symposium by Plato – OGB #6

In Plato’s The Symposium that we read for the Online Great Books seminar, ancient Greek partygoers choose not to drink the night away, again (text is translated by Alexander Nehamas and Paul Woodruff). Instead, these philosophers and tragedians and comedians have a friendly competition: everyone gives their own praise of love. But whose idea of love is true?

After hearing from five others, Socrates goes last. Though his explanations are usually complicated, his praise of love seems most rooted in truth and reality.

DISCLAIMER: I am no Plato scholar. This interpretation is compelling and is open to debate. And also, note that normal intimate relations in ancient Greece look a bit different than today.

Here is a summary of the six speeches, each of which builds on ideas as they respond to the previous speaker:

  1. According to Phaedrus, there is one type of love, which is virtuous and good.
  2. According to Pausanias, there are two types of love: good since it aims to obtain virtuous, soulful things. But the other kind of love is bad since it is shallow, bodily, and uncommitted.
  3. According to Eryximachus, love is the balance and harmony between bad and good love. The virtue of love depends on how the lover controls the direction of love.
  4. According to Aristophanes, love is the desire by one half to its missing other half. Humans were split from one being into two parts. And love is the force driving one to find its counterpart.
  5. According to Agathon, love is simply the best of all good things, including young, delicate, just, moderate, and brave.
  6. According to Socrates, love is a spirit that compels us on a journey to produce immortality by appreciating higher levels of beauty. The lowest level of love is for one beautiful body. The quest for immortality here results in human children. Then the smart person will grow that love of one body into all beautiful bodies. This love grows into a love of beautiful souls, then beautiful customs and activities, then beautiful knowledge. At this stage, the quest for immortality combines the person with beautiful knowledge into birthing good ideas. The highest level is an appreciation of Beauty in its pure form, the essence without grounding in time, space, or example. A person attains the highest level of love and immortality by beholding Beauty and birthing true virtue.

After Socrates’s speech, Alcibiades, the comedian, comes in, drunk from partying. He squeezes himself between Socrates and Agathon as they were flirting. He tells a story that serves as proof to which to test the accuracy of the love speeches.

Alcibiades describes the love that overcame him for handsome Socrates, which became lust for body and power. Socrates rebuffed the attempts until he explained the Alcibiades’s beauty wasn’t enough for Socrates’s offer and pursuit of pure wisdom. He admitted his love to Alcibiades, but Socrates didn’t give in to any seductive advances. Now, Alcibiades often erupts in a jealous rage while still lusting for Socrates’s good looks. But Alcibiades has learned to respect Socrates’s natural character, moderation, and fortitude. He also appreciates Socrates’s ideas and knowledge as the best way to become good.

This story makes sense. Assuming the story is true, let’s put it through the six ideas of love:

  1. Phaedrus’s love is not true because Alcibiades’s love changed forms.
  2. Pausanias’s love is not true because Alcibiades maintained two types of love at once.
  3. Eryximachus’s love is not true because Alcibiades was not in control of the direction of his love.
  4. Aristophanes’s love is not true because Alcibiades and Socrates had a love for each other, but the drives were not compatible as expected from two halves meeting.
  5. Agathon’s love is not true because Alcibiades’s love drives him to appreciate something better than love itself.
  6. Socrates’s love makes the most sense. Alcibiades started with love aimed at Socrates’s good looks. But he then climbed the ladder of love to now appreciate higher levels of beauty: Socrates’s soul and knowledge. Alcibiades’s love itself was not good, but it compelled him on a path to enjoy pure Beauty and produce the good.

Alcibiades puts is best:

If you were to listen to his arguments, at first they’d strike you as totally ridiculous… If you are foolish, or simply unfamiliar with him, you’d find it impossible not to laugh at this arguments. But if you see them when they open up… if you go behind their surface, you’ll realize that no other arguments make any sense. They’re truly worthy of a god, bursting with figures of virtue inside. They’re of great–no, of the greatest–importance fo anyone who wants to become a truly good man.

The Symposium, p. 503

The Symposium is a masterful story rich with profound ideas. But only Socrates’s concept of love emerges as the victor in the battle for truth.