Capitalogix

An Early Look At The Upcoming Election

You know it's election season when Jon Stewart steps back in to host The Daily Show. 

Unsurprisingly, the antagonism and hatred from both sides of the fence are still in full force - now with extra boosts from fake news and AI's influence. 

Surprisingly (to me), the frontrunners are still Biden and Trump, despite them being 81 and 77, respectively ... or despite Trump's several cases against him and Biden's horrible approval ratings ... or ... (it seems like we could keep finding reasons to be surprised).

Truthfully, I am surprised neither party is running someone "better" in this election. 

It feels like almost everyone I talk with is voting for the "lesser of two evils," even though they know it may not serve the greater good.

Here is a chart showing third-year approval ratings of first-term Presidents since WWII.

 

I thought the last Presidential election was pretty interesting, but this one's shaping up to be even more so. If it were fiction, no one would believe it.

The most popular issue on people's minds is the economy, but we also have controversial issues around trust in the government, immigration, abortion, foreign policy, and even the fate of Democracy in America itself. 

For all the economic woes and complaints, the unemployment rate remains low, GDP growth is strong, and the S&P 500 recently hit record highs. Yet, Americans are still feeling it in their pockets as the price of goods has gone up. 

It is a good reminder that the "facts" are often less important than how it feels. 

It is still early, but what do you think will happen?

Going With The Flow: Functional Mapping

There’s a concept in design and transportation called Desire Paths. 

The desired path is the path that users take despite the intended path by the builder of a community or application. 

Here’s a great example. 

Reddit via itstartswithani

And, here’s a whole community forum focused on desire paths. 

It’s often easier to take advantage of human nature ... or just nature ... than fight against it. 

To that effect, I shot a short video on how this relates to your business and tech adoption.  I call it functional mapping.  Check it out. 

 

Understanding the natural path for both technology and your clients makes it easier to understand and anticipate the capabilities, constraints, and milestones that define your path forward.   That means you actually have to understand the different types of users and what they expect to do.

Each stage is really about the opportunity to scale desired capabilities and automation.

It isn’t really about building the technology; rather, it is about supporting the desire.

You don’t have to get it right.  You just have to create momentum in the right direction.  This means that if you understand what is coming, you don’t have to build it … but you should figure out where you want to build something that will move things in the right direction.

You’ve probably heard me talk about how Capabilities become Prototypes.  Then, Prototypes become Products.  And ultimately, Products become Platforms.

This model is fractal.  That means it works on many levels of magnification or iteration.

What first looks like a product is later seen as a prototype for something bigger.

SpaceX’s goal to get to Mars feels like their North Star right now ... but once it’s achieved, it becomes the foundation for new goals.

This Framework helps you validate capabilities before sinking resources into them. 

It helps you anticipate which potential outcomes you want to accelerate.  Rather than simply figuring out the easiest next step … you have to figure out which path is the best next step to your desired outcome.

The world is changing fast!  I hope you’re riding the wave instead of getting caught in the riptide!

Natural Technologies

Nature can be pretty cool. 

It turns out that a lot of what we think humans "invented" was so "natural" that nature created it first.

For example, the British Planthopper has mechanical gears in its legs.

 

Or the fact that the T4 Bacteriophage looks like a lunar lander and has 20 sides.

via biology4u

Interestingly, some of man's greatest inventions are so innate that natural selection (or intelligent design) created them before we did. 

Want another example?

Hospital-acquired infections are diseases caught due to organisms people are exposed to at a hospital (or other healthcare-related areas). They account for over 99,000 deaths a year.

Because of that, R&D worked extensively to find bacteria-killing surfaces …. It turns out Dragonflies have been doing it for centuries.

Research companies (and dragonflies) have used nano-textured surfaces to create a "bed of nails" that destroys bacteria by puncturing the cell wall. 

If you like stuff like this, Check out this link on order vs. chaos.

 There is always opportunity around you … You just have to know where to look.

How To Make Real-Time Decisions

I recently came across an interesting technique that fighter pilots use to make fast and accurate decisions in high-stakes situations. 

The Air Force calls it an OODA Loop.

It is an iterative feedback model that Colonel John Boyd designed as a foundation for rational thinking in chaotic situations like dogfights.

It stands for Observe, Orient, Decide, Act. 

via Wikipedia

Why do people use decision models?  Obviously, to make better decisions.  But really, they use models to create a process that avoids many of the mistakes or constraints that prevent good decisions.

You make countless decisions every day - and at a certain point, you reach decision fatigue.  It can be harder to make decisions when you are tired, after you've made too many, or when the intensity of the environment distracts or drains you. 

It's one of the reasons I rely on artificial intelligence.  Here are some others. 

• Best practice becomes standard practice. 
• It accounts for signal and noise.
• It attempts to quantify or otherwise make objective assessments, comparisons, and choices. 
• And, it often gives you a better perspective by letting you apply and compare different models or decision techniques to achieve the desired outcome.

Nonetheless, many algorithms are dynamic and adaptive automation of processes or strategies that humans have used successfully before.

So, let's take a closer look at the OODA Loop, which stemmed from analyzing many interactions between and among fighter pilots during battle and training. 

Observe

The first step is to observe the situation to build the most accurate and comprehensive picture possible.  The goal is to take in the whole of the circumstances and environment.  It's not enough to observe and collect information ... you must process the data and create useful meaning. 

It's the same with data collection for an AI system.  Ingesting or collecting data isn't enough.  You have to be able to apply the data for it to become useful. 

Orient

The second step is less intuitive but very important.  When you orient yourself, it becomes easier to recognize strengths, weaknesses, opportunities, and threats to identify how changing the dimensionality or perspective alters the outcome. 

This step reconnects you with reality in the context of your cognitive biases, recent decisions, and more.  For example, have you received new information since starting?

I think of this as carrying a map and pulling out a compass while exploring new lands.  Sometimes, you need to remember where you started, and sometimes, you need to make sure you're going where you think you are. 

Decide

The last two steps provide the foundation for taking action. 

When there are multiple decisions in front of you, observing and orienting help you choose wisely. 

In business and with AI, you can go through these loops multiple times. 

Act 

Finally, remember that the best-made plans mean nothing if you don't act on them. 

Once you've taken action, you can reobserve, reorient, and keep moving forward. 

Conclusion

Like most good mental models, The OODA loop works in many situations and industries.

Speed is often a crucial competitive advantage.  For example, knowing (and taking decisive action) while others are still guessing (and taking tentative action) is something I call time arbitrage. 

Said another way, you make progress faster by walking in the right direction than by running in the wrong direction. 

These processes (and technology) also help us grow more comfortable with uncertainty and uncomfortableness.  Markets are only getting more volatile.  Uncertainty is increasing.  But, when you have the ability to adapt and respond, you can survive and thrive in any climate. 

Ranking The Most Popular AI Tools

Last week, I shared some of the tools I've been using recently to help run my business and life. 

As we all know, several AI tools are taking the world by storm - notably ChatGPT, but others as well. 

It only took ChatGPT 5 days to reach a million users. But the whole AI tools market is growing at a surprising rate.

VisualCapitalist put together a nice infographic on the most popular AI tools of 2023. 

via VisualCapitalist.

I am familiar with some of the apps mentioned (such as Quillbot, Character.ai, or Hugging Face), but I don't use them. On the other hand, I had no prior knowledge of others (such as NovelAI, Janitor AI, and Civitai).  

It's remarkable how much of the market ChatGPT currently controls on its own. In 2023, it is estimated that ChatGPT attracted 14.6 billion visitors, or more than 60% of all AI tool visits.

With that said, it's a marathon, not a sprint. The "feel" of this AI market reminds me of the dot-com bubble times of the late 90s and early 2000s. Many products took the world by storm only to be overthrown by a more robust competitor. For example, consider how few early web browsers or search engines still exist. I suspect that will be true of many early leaders here, too.

It isn't sexy, but it is a safe bet that Google's Bard and Microsoft's Copilot will continue to grow because of investment, acquisition, and distribution.

Remember, new technologies lead to new products and new platforms ... and the current crop of these AI tools are still only at the beginning of their cycles. I anticipate that many innovative frontstage products like ChatGPT will gain greater importance and profitability (albeit with less prominence) as they move backstage to become the backbone or plumbing infrastructure of various other products and services.

The development of new technologies brings about the emergence of new products and platforms. 

AI capabilities and adoption are growing exponentially. It will be interesting to see what else stays on the list three years from now. 

Posts like these are helpful reminders to consider technology adoption and hype cycles.

It's only the beginning ... Onwards!

Predictions for 2024

At the beginning of 2022, I shared VisualCapitalist's predictions for the year, and then at the end of the year, we checked to see how well they did. 

Since they posted a 2024 version, I figured, why not do it again? 

via VisualCapitalist.

You can find forecasts anywhere ... but since they're basically guesswork and I don't know what data they are using or excluding, I don't spend much time on them.

That said, I found this infographic easy to look at and think about. So, it's as good a place to start as any. Also, VC draws from a database of 700 expert forecasts to make this chart. 

Some are pretty easy to predict - like GenAI's shift to text-to-video. Or, an increase in lawsuits and regulations around AI. Others are questionable. In the past few months, we've seen TikTok investing heavily in the growth of its e-commerce business. Insiders have stated they believe they're trying to compete with Amazon. We'll see how that goes?

On a positive note, it seems like most are predicting positive effects on the market & economy, including a decrease in inflation and interest rates, bonds on the way back, and record highs in the S&P 500.

I'd love to hear your predictions. What do you think?

2023 In Review

Last week, we asked how markets did in 2023.  This week, I want to highlight some of the significant events that occurred in 2023.   

Here is a Visual Capitalist infographic to help.

2023 was defined by two major themes, the first being geopolitical strife, and the second being the proliferation of artificial intelligence. 

What geopolitical strife, you ask?  Seemingly everywhere you looked (from China and Taiwan to Russia and Ukraine, the Middle East, or even the happenings in  Britain and the U.S.) ... This was an interesting year. 

Of course, there were other types of significant events, too, like the collapse of several Silicon Valley/Crypto banks. 

Many of the trends we've seen in 2023 will have aftershocks in 2024.  Still, the only thing constant is change ... and it will be interesting to see what changes.  I think we've seen increased caution as a result of the last few years, but I think people are now getting used to the new normal. 

Do you expect 2024 to be better?

Time will tell.

Don't forget the Trump trials and that it is an election year ... or that crypto is making a comeback – and AI will only accelerate.

We live in interesting times!

The Time You Have Left ...

I recently asked How Long Do You Have Left?

As I wrote that article, I was reminded of my TEDx talk on my father's passing. 

In finance, the "time value of money" refers to the principle that the purchasing power of money can vary over time (meaning, money today might have a different purchasing power than money later). This is partly because money's future value might be calculated by accounting for other variables (like interest earned, inflation accrued, etc.).

A similar calculation applies to life ... or living.

Live Like You Only Have a Year Left.

During the last part of my Dad's life, I think he would have done almost anything for a little more time.

Things that used to be unimportant, or even mildly irritating, took on increased importance. For example, a dinner together became almost a sacred event; a kiss goodnight was truly heart-felt; and saying good-bye meant something ... because it could be the last time.

Nevertheless, as a result of that focus, he took more life out of that time.

Shouldn't we do the same thing?  Think about it ... We are never going to be younger than we are, right now.  We are never going to have more time to fix a big mistake.  Isn't it likely that the time value of your life, is worth maximizing?

If you realize that your time is worth more than it ever will be, what can you do differently now to get the most out of it?

For another impactful view of life, here's a great video on how you spend the time in your life – visualized using jelly beans. I think it's pretty powerful and worth watching. 

 

Ze Frank (via YouTube)

 

So, if (after accounting for sleep, eating, work, commute, TV, chores, and more) an average person only gets 2,740 days to do what they want ... those days are precious. That's less than 8 years of "free time" for you to make the most of. 

Based on the demographics of who's likely reading this, you may have half that time (or a fourth).

What are you going to focus on? Making the most money? Helping the most people? Spending the most time with your family? Relaxing? I hope you don't choose worrying. 

There's never a better time than now to live a life worth living ... and only you can decide what that means!

I'd love to hear what you choose. 

Best wishes for a Happy Holiday Season ... and I hope you spend your time wisely and well in 2024!

Happy New Year!

I love planning for the new year – both personally and professionally.  To read about my professional planning, check out this article. 

I've always been a big-picture person, so I tend to think in 5, 10, and 20-year increments ... but thinking about the coming year is helpful, too.

I think about it a bit like using a map.  Even if you know your intended destination, you still have to start with 'where you are' to figure out the best way to get there.

There are seemingly infinite potential paths ... but motion in a direction isn't really "progress" if it doesn't take you towards your desired destination.

At midnight tonight, it'll be 2024.  I know a new year isn't really a blank slate, but I've always enjoyed the symbolism.  So, I thought I'd revisit how I set New Year's resolutions. 

To start with, resolutions only work if you actually "want" to make them happen.  It's one thing to hope that something magically falls in your lap; it's another to want to do the work. 

With that being said, here are some tips. 

• Focus on What You Want.
• Focus on Why You Want It.
• Focus on Ways You Might Get it.
• Focus on Evidence of Progress.

Below, I'll take you through an example of each of the four steps.

Moving Towards a Solution, Rather Than Suffering From the Problem.

Before I got back into my health, my first instinct was to think, "I need to lose weight."  Knowing that "you're fat" isn't helpful … my head quickly translates that to something a tad more positive, yet generic, like: "I choose to be healthy and vital, and to live a healthy lifestyle."

Blah, blah … They are just words.  What I needed was something specific, measurable, and actionable.  How about: "I will lose 15 pounds and stop eating after dinner."  OK, but that isn't inspiring, and there isn't much for me to do.  I can do better than that.

Figure-Out a Big Enough WHY, Rather Than Worrying about the HOW's.

This post isn't about health and fitness; it is about the mindset and techniques you can use to set empowering goals and plans in any situation.

So, while I could list many ways to lose weight (and I might even remember to do some of them), leveraging a driving force creates momentum.  In other words, the first step in "Doing" is knowing WHY you want something.

I really do want to be healthy, fit, and vital (it sure beats the alternatives), and I want to have the energy and confidence to live and enjoy my life fully.  The world is my playground, and I want to take advantage of more opportunities to play with family and friends.  However, to do those things, I must find better ways to live a healthy lifestyle.

The WHYs are just as important for business goals too.

Focus on Potential Solutions Rather than Problems or Challenges.

Obstacles Exist.  The bad news: I don't eat fish, and I don't like vegetables (unless French Fries are vegetables).  My joints aren't close to healthy from years of violent contact sports.  I rarely get 7 hours of sleep, and who'd have thunk it, but being the CEO of a startup is stressful.  The good news: none of those things matter ... and even if they did, it just would mean that I have a lot of room for progress.

It is natural to focus on obstacles.  But most obstacles are surmountable - with a big enough WHY, I'll even start to eat vegetables.  Instead of dwelling on the limitations, use them as a reminder to focus on potential solutions instead.  They are beacons marking the way.

How do you do it?  To focus on solutions, you can make two action-based lists: one is of things To-Do ... and another is of things Not-To-Do.

Here are some of the sample To-Do Items:

• I will drink more water than coffee.
• I will stretch or do basic calisthenics on days that I do not go to the gym.
• I will make a healthy shake as a meal replacement rather than a snack if I'm hungry between meals.
• I will focus on relaxation and meditation as much as I focus on strength & physical exercises.

Here is the actionable list of Not-To-Do Items.

• I will not buy new bigger pants or wear stretchy pants because of an expanding waistline.
• I will not eat snacks out of their container – and will portion out what I want first.
• I will not compare my current level of fitness to what I used to be able to do.  Instead, I will focus on my actions and improvement.

Create Healthier Habits.

It is easy to follow a routine.  So, here's another tip ... make your routine better.  Here are some examples of things you could do to make being healthier happen with less effort.

• Pre-sort your vitamins into daily doses, and keep them by the coffee machine.
• Buy healthy snacks, like fruit, raw nuts, or organic energy bars (instead of chips).  If Doritos aren't in your house, it's hard to eat them on any regular basis. 
• When you do snack, don't keep them near you.  Make yourself get up to get them.  That'll make it harder for you to binge. 
• Enjoy listening to music, audiobooks, or podcasts during your "exercise time." Dedicating time to something doesn't mean you can't be multitasking.
• Park at the end of the parking lot, so you get to walk.
• Meet with friends at the gym or a hiking spot rather than a bar or restaurant.

You get the idea.  Get in the habit of looking for ways to create better habits.  What habits could you alter slightly to make a big difference?  Which things can you automate or outsource?

For two books about the subject, I recommend Tiny Habits by B.J. Fogg and Willpower Doesn't Work by Benjamin Hardy. 

Focus on Your Progress.

In this case, it really is about the journey.  Instead of tracking how far you have to go ... notice how far you've come.  Utilize an internal locus of control.  It is about creating energy, momentum, and a sense of possibility.  You may have a big, hairy, audacious goal in mind.  That's fine, as long as you realize that reaching each milestone along the way is still an accomplishment.

• Find shoes that don't hurt your feet.
• Pick a gym or a personal trainer that you enjoy.
• Run more than two laps without stopping.

It doesn't matter what they are ... they all count, as long as you know that you are moving in the right direction.

Summary

The point of this exercise was not really to focus on fitness.  These techniques and goal-setting tools work in any situation.  The principles are:

1. First, figure out what you want and why it is important to you.  Only focus on the few things that are actually important to you. 
2. Second, find something you can do, right now, which moves you in the right direction.
3. Third, notice which things create (rather than take) energy.  Spend your time on those, and automate or create routines to take care of the rest.
4. Fourth, plan forward, but measure backward.  Set milestones so that you can recognize and celebrate your progress.

In my business, this translates to having a mission and vision - it's what we want, why it's important to us, and a basic strategy to get there.  Then, we create yearly "Big 3" goals that move us toward that long-term vision.  Then, the team creates SMARTs (goals that are specific, measurable, attainable, relevant, and timely) and KPIs (key performance indicators) so they know where to spend their time, and what milestones tell them they're on the right track.

It isn't magic, but it works.

Hope this helped.

The World's Top 25 Defense Companies

What's happening in the Middle East with the Israel-Hamas war is incredibly complicated and polarizing.  On top of the long history, partisan interpretations, chronic conflict, and acute suffering, you're seeing propaganda being used at a scale beyond what we've seen before. 

Technology is a big driver of misinformation - and what is happening now provides an early warning of what's to come in future wars and political contests. 

While the topic of Israel and Hamas is beyond the purview of this blog/newsletter - the impact of war on markets is not.

My heart is with all impacted, and I'm never rooting for war or the death of innocent civilians. 

With that said, war seems to be a fact of life.

The most powerful countries in the world spend billions of dollars on defense a year. 

In light of this, VisualCapitalist put together a chart identifying the top 25 defense companies in the world.  Many of these have seen massive spikes in price in the past few months.  I was surprised by how many of the companies I didn't recognize.

 via VisualCapitalist

The U.S. unsurprisingly tops the list, with Lockheed and RTX (formerly Raytheon) taking the top two spots. 

While we don't usually think of some of these companies as defense contractors, Airbus produces multiple drones and transports, Rolls Royce is a supplier of aircraft and naval engines, and Honeywell is actually involved not just in aerospace - but actual space. 

Understanding where and how companies generate revenue (as well as comprehending the relevant competitive landscapes and cooperative ecosystems) are crucial activities regardless of investment strategy.

I believe it's easier to predict human nature than it is to predict technology.  There is a reason that new technology often flows into porn, gambling, and military earlier than other areas ... the reason is that it's so easy to monetize there. We know opportunity often rises from pain and conflict - so it's still valuable to understand these concepts and figures. 

Hope that helps.