Sunday Snapshots (28th June, 2020)
Cable Cowboy, Mastery and Chess, Amazon's playbook x self-driving cars, Oura ring x NBA, and a new Snapshots corner
Hey everyone,
Greetings from Evanston!
A special welcome to all the new Snapshot-ers who joined this week. Some quick background on me for them: I grew up in India and SE Asia, came to the US for my undergrad, and just graduated from Northwestern University as an Industrial Engineer. Despite doing math and coding for most of my 4 years at college, I also have an interested in history, strategy, and tech (mostly to get away from all the math and coding.) In order to cultivate these interests and create a forcing function for learning, I started writing this newsletter 58 weeks ago and haven’t missed a single week.
Back to the present day where it’s been a relaxing week for me as I’ve done some reading, written some letters, and outlined my upcoming book, Lessons from LBJ. Next week looks like more of the same.
While that does mean that I’m a bit bored every now and then, it also means more time to dedicate to this issue of Snapshots, in which I want to explore:
Cable Cowboy by Mark Robichaux
Chess, perception, mastery, and a challenge
Amazon’s playbook: The self-driving chapter
Oura ring, NBA, and the next phase of medicine
And a new Snapshots corner!
Book of the week
Imagine an industry in which the government is both your best friend and your worst enemy. Imagine an industry in which you can directly influence the hearts and minds of an entire country. Imagine a business that despite having its heyday four decades ago, still echoes today.
Welcome to the world of cable television.
This week, I read the first half of Mark Robichaux’s Cable Cowboy. This is an amazing book that chronicles the rise of not just the cable industry, but the birth of the modern media and technology landscape. The CEO of Tele-Communications, Inc. (TCI), John Malone takes center stage as we chronicle his rise from the David to the Goliath who takes on an even bigger Goliath – the US Government. Through his story, we see the story of thousands of cable operators around the country and the world.
Here were my takeaways:
Cable vs. Broadcasters: Over the 60s, 70s and 80s, there was an arms race to put a television in every American home. There were two major categories of players – cable and broadcast. Cable companies delivered programming through “catching” them on national airwaves through large towers and sending them through physical cables to every house. Broadcasters relied on every TV set having an antenna to catch the signal – like a radio.
Uber-styled guerrilla tactics: Local governments were the ones who issued cable licenses for their area. If a particular town’s government didn’t agree with Malone’s proposals or wanted a larger share of revenue as taxes, Malone would resort to guerrilla tactics. In one such case in the town of Vail, Colorado:
At 6:35 p.m. on November 1, 1973, the TV screen of every TCI customer in Vail went dark. TCI had pulled all programming, substituting it with the names and home phone numbers of top city officials, including the mayor.
The customers knew who to blame, and it wasn’t TCI.
This portion read eerily similar to Uber’s efforts to overcome regulation by Mayor Bill de Blasio. From The Fixer by Bradley Tusk:
When Kaitlin Durkosh on the Uber New York team had the brilliant idea of making “de Blasio” one of the options on the app (next to Uber Black, UberX, UberXL, etc.), we had a way to capture people and mobilize them. (If you chose the de Blasio option, you were told there was twenty-five-minute wait time, we explained the problem, and then asked people to email and tweet at their council members to tell them to oppose the mayor. In a week, 250,000 did.
When you’re fighting against a government official, it’s always good to have a product that people love and can’t live without!
Early example of tech company-styled governance: The parallels behind tech companies and Malone’s TCI don’t end at guerrilla marketing tactics against local governments. The company was one of the first examples of dual-class stock options that allowed massive investments from Wall Street but protected the CEO’s majority voting position. Since the cable business had very high fixed costs, TCI had to raise a lot of debt. In order to avoid any creditor potentially turning that debt into stock and taking over control of the company, Malone issued two classes of stock – Class A and Class B. Both would have the same monetary value, but Class B shares would have 10-to-1 voting power over regular class A shares. Doesn’t take a financier to guess which one Malone owned.
Vertical integration: Once favorable federal legislation opened the floodgates for expansion, Malone started to look at owning the programming that flowed through his cables. He wanted to buy into networks that created content and did so with the Discovery Channel, the Family Channel, the American Movie Classics Channel. Because of his large distribution network, he was a hit-maker. Any channel he choose to push through his cable network would have an overnight success. This lucrative combination of distribution and content was a sign of troubled times ahead.
In the first half of the book, Malone is the underdog who takes over a debt-ridden company and makes it the largest cable network in the country. In the second half, he fights with all his might to protect that No. 1 spot.
Stay tuned for next week’s programming on the story.
Long read of the week
Perception in Chess by William G. Chase and Herbert A. Simon
What goes through the mind of a grandmaster when they look at a particular configuration on a chessboard? That’s the question that this paper written in the 1970s aimed to answer.
Turns out, it’s not all that different from what goes through the mind of an amateur player. Using measurements of eye movements, it’s been shown that they look at the board, consider a few moves, play out in their heads how those moves could pan out, and after some deliberation, make the move that seems the best.
So what explains the massive differences in performance? This paper claims that it’s the ability to extract contextual information from a given position, encode that information into chunks and map these chunks against previous games played or studied. Chess therefore becomes a game not of superior intellect, but of superior memory.
This figure showing the number of positions players were able to reconstruct after exposure for only a few seconds. Masters performed markedly better.
Grandmasters, through years and decades of study and practice, are better at encoding larger chunks of positions and mapping them against previous games.
This paper was shared by quantum physicist Michael Nielsen in a thread about Stephen Curry having perfect memory about important plays in his career. Nielsen argues that the improvement in his craft came through deliberate post-game analysis. I decided to do some post-game analysis of my own.
Here’s my challenge for the month of July: I’m going to go through all my writing on this newsletter over the past 57 weeks, analyze it, and share my lessons.
Watch this space.
Business move of the week
Amazon’s Playbook: The Self-Driving Chapter
Amazon acquired self-driving company Zoox for more than $1.2B this week. The Bezos specter descends upon the likes of Tesla and Uber – companies that have self-driving ambitions of their own.
If we look at Amazon’s playbook in other industries, it follows a three-step process:
Make massive upfront investments
Become the first customer of the technology
License the tech for others to use
Amazon has already done this in the e-commerce and computing power industry:
It invested billions of dollars to develop its fulfillment network, first only using it for products that it owned. Then, it allowed third-party merchants to plug into it.
Using profits from its e-commerce division, it invested into building cloud computing services for itself. Then, it offered the same service to anyone through AWS.
You would be hard-pressed to find a better industry to apply this playbook to than self-driving cars. It requires massive upfront costs to develop this technology. Amazon can be its own first customer through the massive network of trucks and delivery vans it owns. Then, it can offer it to players like Tesla, Uber, and Lyft – all while taking a nice margin off the top.
These are my initial thoughts. There are competitive interactions that make this playbook more complicated than others. More on this in an expanded blog post later this week.
Random corner of the week
Oura ring, NBA, and the next phase of healthcare
While it’s not uncommon to see NBA players who have them flaunt their championship rings, they might be caught sporting a different kind of ring soon.
Since coronavirus paused the NBA season, players and fans have been itching to get back on the courts. But since health concerns remain ever-present, the health of all the players needs to be monitored – it would be extremely bad PR for the NBA if multiple players got sick due to transmission through a game.
On a side note, I would love to see the scenario response plans they have drawn up in case this happens.
In order to do this monitoring, players will have the option of wearing an Oura ring that tracks their resting heart rate, heart rate variability, body temperature, respiratory rate, and other vital signs. In collaboration with West Virginia University’s Rockefeller Neuroscience, the company behind the Oura ring has developed an algorithm that predicts whether or not someone has COVID-19 with 90% accuracy up to 3 days ahead of symptoms. That seems like a very high number, so let’s think through some caveats:
Oura’s algorithm was trained on data obtained from its existing customers. These customers are conscious enough to have a ring that tracks their key health indicators, so they are much more likely to be healthier overall. So while the algorithm may translate well to athletes (a population that is also healthier than the average person), it would probably not work for the general public.
Given that many cases have been asymptotic and general anti-body testing hasn’t been available to check for overall exposure in the population, the indicators used by Oura’s algorithm might not work for those asymptotic cases. I know the company is trying to do widespread anti-body testing amongst its users to fix this problem, but that will take time to conduct and incorporate into the algorithm.
At the end of the day, it’s an expensive ring. While it may be wise to divert dollars to subsidize these for at-risk populations and essential workers, it’s not accessible for the general population.
Despite these caveats, I do think that the ring will help re-open sports in a safer, more controlled environment in which we can “see around the corner” through the help of technology. It’s also the future of healthcare.
I can easily imagine this ring or the Apple Watch predicting fevers and other common illnesses through the constant analysis of vitals. You could have a health dashboard to compare yourself against other people of your demographic background. Privacy concerns in this new future would be real, but they could be mitigated through local storage of identifying information and end-to-end encryption.
This is going to be one of the most exciting spaces to watch.
Odds and ends of the week
This is a new corner for stuff that don’t require a ton of editorial comment, but that you should check out. I’ll typically feature one article, one video, and one podcast episode.
This week:
📝 The Evolution of Robert Moses by The Rational Walk: Robert Moses was the legendary builder that shaped New York City in his image. This essay explores his evolution from an idealist to a bully. For those willing to take the plunge, follow it up with the book that it’s based on, The Power Broker.
🎥 Making Chicken Chickpea Burgers by Kenji López-Alt: These POV videos by Chef Kenji are amazing and form the basis of my late-night cravings. I watch every single one of them but this one was particularly good.
🎧 Talk Therapy by Nathan Baschez and Dan Shipper: Nathan and Dan are writers first, but they are also podcasters as of this week. They started a show about the trials and tribulations of building their new media business, Every. I’ve caught up with the backlog and am excited for new episodes!
That wraps up this week’s newsletter. If you want to discuss any of the ideas mentioned above or have any books/papers/links you think would be interesting to share on a future edition of Sunday Snapshots, please reach out to me by replying to this email or sending me a direct message on Twitter at @sidharthajha.
Until next Sunday,
Sid