Value Stagnation Leads to Disruption
Edition #078
Introduction
Welcome to The ContraMind Code.
The ContraMind Code provides you with a system of principles, signals, and ideas to aid you in your pursuit of excellence.
The Newsletter shares the source code through quick snapshots for a systems thinking approach to be the best in what you do.
The Code helps you reboot and reimagine your thinking by learning from the best and enables you to draw a blueprint on what it takes to get extraordinary things done. Please share your valuable thoughts and comments and start a conversation.
Take a journey to www.contraminds.com. Listen and watch some great minds talking to us about their journey of discovery of what went into making them craftsmen of their profession to drive peak performance.
Throw away your first draft of your code.
While reading thro’ this newsletter, these hard facts caught our attention which most of us have either experienced or faced when dealing with large projects or while building products along with product management and engineering teams!
Some truths when you are writing or reviewing a code or evaluating the product/project and thoughts on how to handle them:
When you develop a major new feature, product, or anything, one of the defining characteristics is that you don't know what you're building.
This leads to a problem: If you don't know what you're building, how do you know where the rough edges are? How do you know what the design demands and what technical decisions to make? There are usually some aspects that you just cannot predict.
Take a rough, high-level description of the problem and give it to 1-2 highly skilled engineers to implement. Give them a couple of days, and see where they get(With a Prototype).
Prototyping work is often best completed with some of the more experienced engineers: They'll move fast, learn a lot, and have the context needed to know which parts to prototype the most for the investigation.
If you know that you're possibly keeping the code, you do things in a "proper" way, which means moving slower.
Read the article here.
Founders Podcast: #314 Paul Graham (How To Do Great Work)
We shared Paul Graham’s Essay in this newsletter a few weeks back- ‘How to do Great Work’. Now, David Senra, the host of Founders Podcast, shares a more profound viewpoint as his learnings from reading Paul Graham’s Essay. This is a brilliant and detailed account of many points from this essay that David finds fascinating, which he urges us to focus on and reflect on.
Here are some highlights that we found inspiring that David shared with us:
First, find something you have an aptitude for and are interested in. This is vital to do great work.
How do you know you may fit or be suited for that work? ‘One sign that you're suited for some kind of work is when you like even the parts that other people find tedious or frightening.’
What’s your timeline for doing great work? It’s a long, arduous path - ‘You may have to work at something for years before you know how much you like it or how good you are at it.’
The key to doing great work is consistency - ‘Writing a page a day doesn't sound like much, but if you do it every day, you'll write a book a year. That's the key: consistency.’
Why do you need to have an understanding partner to do great work? ‘Don't marry someone who doesn't understand that you need to work or sees your work as competition for your attention. If you're ambitious, you need to work.’
What must you have or seek to do great work? Be ready to adapt and change, have curiosity and seek out the best colleagues - ‘Curiosity is the best guide. Your curiosity never lies…Change breaks the brittle.’
Listen on:
Provocative Predictions for the Future of Tech
Summit is an ecosystem that connects and nourishes global creatives, entrepreneurs, innovators and leaders of our time.
Every year, Scott Galloway, Professor of Marketing at the NYU Stern School of Business, makes tech, business, and cultural predictions and tries to hold himself accountable. In this talk, Scott looks back at how his predictions from 2021 panned out, examines current trends like the metaverse and geopolitics, and shares his vision of the most significant opportunities coming up in the near future.
Here’s the summary of the takeaways:
Disruption happens when the cost of products or services disproportionately increases w.r.t to the value they deliver or offer. It happened to the automotive industry, gas stations ( Tesla came and disrupted them), Retail got disrupted (Amazon came and disrupted them), Advertising Industry( Google came and disrupted them), and the TV Industry( Got disrupted when Netflix came in).
AI is going to do that to many industries or work.
Companies that build Time Machines are the ones that give you back more time to do the work you do and will win customers more and more - Amazon & Netflix have given you more time back, saving you time from the chores of shopping and watching ads!
Income equality transforms into income insanity! For every $100 created, $54.40 went to the top 1%, $49.90 went to the 50-99%, and $0.70 went to the bottom 1%! The wealthy weaponise the government.
Luxury is the best business! They create artificial scarcity.
The value of sports teams will grow in the next few years!
The curve on AI is accelerating - 1 million users in 5 days! AI will disrupt many industries - travel, healthcare etc.
Click and watch the above video for brilliant thoughts and trends captured by Scott.
Value Stagnation Leads to Disruption
Listening to Scott's presentation, one compelling insight was how every industry needs to continuously benchmark the value they deliver to their customers. It also seemed applicable to even the workforce these companies were employing and exchanging a commercial value through payment of wages by valuing their skills. There is a strong correlation between the two when disruption happens to these industries and their workforce.
So, what is value stagnation?
When new industries or products emerge, customers perceive a significantly higher value than they are getting from their present products or services and are willing to pay an additional price to switch.
Let’s take the Auto industry that Scott was talking about. During the early 1900s, an automobile significantly changed the transportation time of goods being sent to different business districts and people’s time to travel between urban & rural centres etc. A sense of prestige was also associated with automotive vehicles, and different price segments started emerging. Over time, the value benefits of automobile ownership vis-a-vis the price paid by consumers continued to diminish, and this did not happen overnight but happened over 50-75 years till Tesla came in and disrupted the industry. But, during these years, the automobile industry tried to justify or refused to accept the reality of ‘Value Stagnation’ vis-a-vis the prices they were seeking from customers. Their costs had become increasingly disproportionate to the value that was being delivered to their customers. When an alternative came, customers just switched. The entire industry is now playing a catch-up game.
When you look at the value stagnation of skills from the people employed in this industry over decades, their skills stagnated as the industry did not demand any new skills. Still, they were in a ‘cost optimisation’ or ‘incremental upgrades’ mode. They were being overvalued for their skills by the industry. However, when a disruption like Tesla happened, this industry needed an entirely new set of thinking and skills, making many of them irrelevant and putting them at risk. The workforce in this industry continued to chug along for decades, some knowing fully well or most others blissfully unaware that there was value stagnation w.r.t skills vs salaries they were being paid. Listening to Scott’s presentation, the disruptions do not happen from these large institutions, which become behemoths, but from the small ones outside the industry. Hence, the workforce needs to be aware of the stagnation cycles of different technologies or products, be mindful of the changes happening around them, and be prepared for it even if their industry or company may be slow to change.
The same thing applies to the retail and energy industries, with e-commerce or fossil fuels being slowly replaced by batteries, etc. The question to ask ourselves is whether this moment is fast approaching specific industries - healthcare, technology and software industry with AI. The factory workers of the 1960s got disrupted by industrial & robotic automation, and the software workers of the 2020s will be replaced with the need for new skills; for example, Dev/Ops engineers are slowly becoming redundant, and demand for prompt engineers may increase.
This ‘Value Stagnation’ evaluation - be it any industry and if you are an employee associated with that industry, needs continuous benchmarking, scanning of the environment for disruptive technologies or innovations and an honest assessment of the cost-to-value equation.
If you don’t disrupt yourselves, somebody else will do when there is a value mismatch.
Some of the lessons we learnt from this week’s mission:
It’s normal not to know enough when you are building something. You have to learn to build a product around the ambiguity surrounding it.
Doing great work requires the aptitude, passion and the will to work hard to be the best. And this does not happen overnight.
Disruption happens when there is a cost-to-value mismatch. Evaluating this for yourself and the industry you work in is essential.