📚Business as an Equation, MSCHF Way of Scaling Taste, Form that Fits Context, Dallas Cowboy Cheerleaders, 2nd Person Video Game

The Sleeping Metaphor, Horny Truth about AI Chatbots and more

Hi, this is post #172.

I just came back from a refreshing trip to Pondicherry. I had been waiting for this trip for some time. I did some planning, but it went horribly short on being useful. The hot & humid weather combined with the long weekend crowd (I was part of the problem here) made most of the plan go for a toss. Yet, we could improvise well, and figured out things that gave us joy.

My highlight of the trip was visiting a tiny book shop “Books & Things.” It offered a curated collection of books & other merchandise from Tara Books. Those were some of the most beautiful and engaging books I’ve ever seen. I felt like a kid in a candy shop. 

I had a similar joyful experience when I had visited Gulshan bookstore in Srinagar. It had a vast collection of not-so-common books, arranged in an aesthetically pleasing way. 

I now know one activity that I want to do when I visit and spend some time in any new city - visit a good book shop and try to soak in the book taste of locals.

While driving back, we heard a podcast covering Trilogy an indie bookshop in Mumbai. The discussion covered its story, what books can do and how a community gets formed around such businesses. It sounds my kind of team and place. 

Folks from Mumbai, what do you think? If you’ve not been there yet, please do go and report.

Others, what is your favorite bookstore? Tell me places that I should visit when I come to your cities (or your favorite city). 

And now, a quick look at today’s post:

I’m super excited about today’s lineup. Let’s get started!

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🔣 Business as an Equation

Lenny and Dan Hockenmaier’s post talk about how to describe your business as an equation 

Every business can be distilled into a simple equation.

And until you can express your business as one, you don’t fully understand it. 

Figuring out this equation forces you to think about the inputs that drive your business, the outputs you want to prioritize, and how these variables interact.

They cover the most common business models - B2B, B2C, Marketplace and D2C. These are simplified equations yet they are great starting points to understand the levers. 

Here’s a reference of B2C Subscription business:

Towards the end, they touch upon how to incorporate margin and calculate payback periods. These are must-know details of a business model.

When I entered the gaming business, this was one of the first things I focused on. A tenured leader took me through the business equation, margin equation and typical cost structure of the business. Understanding the under the hood details helped me appreciate many business & product decisions much better.

I highly recommend this post & this task of understanding business equation to all the folks. This can really enhance your quality of contribution and problem solving from early days in a new business (and industry)

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👢 Scaling Taste - The MSCHF Way

In “The art of scaling taste,” Evan Armstrong talks about how MSCHF turns irreverent ideas into a real business.

For the uninitiated, here’s what MSCHF is and does.

The group releases a brand-new product every two weeks, each of which has little physical relationship to the previous drop. Their recent releases include edible AirPod-shaped candy, a perfume that smells like WD-40, and a collaboration with Crocs on a mid-calf boot. In the last five years they have released more than 100 products. Each drop is creative and rebellious, winking to the world that capitalism is a necessary joke. They do all of this with a team of 34 people, most of whom are generalists with no background in making physical goods. 

MSCHF’s art is both the objects they create and the business itself. To accomplish this harmony, MSCHF explicitly programs the idea of scaling into their work—not as the business’s goal, but as a key component of the products they make.

Part of the reason that MSCHF’s taste process works is that individual artists within the collective subsume themselves to it. None of their artists are allowed to put their names on anything they create. By allowing their individual identities to be absorbed into the collective, they get a larger platform and more resources for their creativity. […]

One of the benefits of producing consistent creative work is that it comes with a narrative network effect: The more people who know and love the story of an object, the stronger the tie to that object becomes. For a brand like MSCHF, success might not always come from money—sometimes, it comes from products that reinforce how they want to articulate themselves in the world.

Evan goes on to share some more details on how MSCHF operates & takes bigger bolder bets. Their growth hack efforts around distribution are worth reading about. It’s unlike anything I've read about anywhere. 

MSCHF is crazy - they do their name great justice in every aspect.

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💡 Form That Fits Context 

Henrik Karlsson posits that “Everything that turned out well in my life followed the same design process.”

If I look at things that have turned out well in my life (my marriage, some of my essays, my current career) the “design process” has been the same in each case. It has been what Christopher Alexander called an unfolding. Put simply:

1. I paid attention to things I liked to do, and found ways to do more of that. I made it easy for interesting people to find me, and then I hung out with them. We did projects together.

2. I kept iterating—paying attention to the context, removing things that frustrated me, and expanding things that made me feel alive.

3. Eventually, I looked up and noticed that my life was nothing like I imagined it would be. But it fit me.

He goes on to expand Christopher Alexander’s definition of success in this context - the form fits the context. 

Pause for a moment, and think about it. If this snippet touched your curious nerves, you have a lot more of such insightful thoughts waiting for you at Henrik’s post. He writes beautifully, his examples taking you gently to ideas that often touch the right chord. 

There is another piece that I had shared earlier, and will do it again for those who have not read it yet. It’s simply fabulous. The title of the post gives you a glimpse into the beautiful journey it's going to take you - A blog post is a very long and complex search query to find fascinating people and make them route interesting stuff to your inbox. Just go for it!

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👯 Dallas Cowboy Cheerleaders

In India, cheerleaders are not part of our sporting experiences. IPL was probably the first event to bring the cheerleading squads in our stadia and on the TV screens. They wore their skimpy uniform, cheered on big events (4s, 6s or wickets) and danced on bollywood tunes during the over changes. Suffice to say, we picked up the easiest pieces of the puzzle. 

Anne Helen Petersen’s essay on Dallas Cowboy Cheerleaders is a good piece if you are interested in knowing more about the profession of cheerleading. Dallas Cowboy Cheerleaders (DCC) are probably the most admired girls in this business. The essay goes into detail explaining the life & works of these girls.

They’re actually competing with themselves. These women have thoroughly internalized the male gaze, their to-be-looked-at-ness, and arrived at a place of incredible power — as objects. Their struggle, as evidenced by the ample time we spend with those who’ve “retired,” is figuring a sense of self outside of that objecthood.

I am not an expert on this topic, but found her explanation around the objectification of DCC girls fairly interesting. There are some harsh truths that stare at us; Anne has not mixed her words and highlighted them as is.

The next scene confirmed it: the football was a prop, a way of ensuring that men in particular would abide by the rule that they could look but not touch. To be clear, I think women should be able to dress however they want (including in a cheerleading outfit) and not need a football prop to prevent inappropriate touches. But the football highlights a tension in the Cowboys moral universe, where God and football and patriarchy and Texas quasi-nationalism all intermingle. The cheerleaders are supposed to suggest sex, but not be sexual.

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📑 How to Read an Econometrics Paper

I struggle with reading annual company filings and academic papers because they are often dense, boring and complex. This complexity quickly discourages my interest in learning. 

I’m not alone in this struggle. Existence of essays like “How to read an econometrics paper” proves just that. Its author Frank DiTraglia is an Associate Professor in Economics at University of Oxford, so I am assuming that he knows (some of) his stuff. (ps: This goes against one of the advice he shared in the essay, by the way. But that’s ok.)

Here’re a couple of useful inputs from the post:

If you’re confused, don’t assume that it’s your fault. Notice your confusion and try to get to the bottom of it without taking things for granted or engaging in negative self-talk. The only way to learn is by getting confused and then unconfusing yourself!

You may be confused because the authors assume you know something that you don’t. They are likely experts in the field who have spent years thinking about this particular question. You, on the other hand, are just starting out. As you gain a bit more context, things may fall rapidly into place.

I can think of many occasions when I skimmed nine papers and didn’t understand any of them, but then read a tenth and suddenly everything clicked. The key here is context. When you’re new to topic Y, there will be lots of little things that you’ve never thought of before but that the literature takes for granted. Since most papers are written for specialists by specialists, crucial details are often left out or glossed over as if they were obvious. 

While this post talks about econometric papers, the core ideas can be applied for most fields and topics. 

I am still looking for similar help on annual company filing. Anything that you can recommend?

(via Marginal REVOLUTION)

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🐇 The Sleeping Metaphor

A sleeping metaphor is something that had meaning for ancient folks, but it does not mean anything to us anymore.

Eugene Terekhin’s post “The sleeping metaphor awakes: how a rabbit and grapes reveal coptic hope” introduces us to the idea with a great story about rabbits. 

How rabbit is the only animal that becomes smart unto salvation when in mortal danger.

It’s a short read and offers intriguing observations like this:

Grzimek points out that all other animals default to one of three “normal” behaviors in danger — fight, flight, or freeze. Rabbits can do any of the three, but they can do much more. If chased by a wolf, they will run in a circular trajectory so they can suddenly jump out of their own tracks in one long leap after making a complete loop. The wolf loses the scent.

(via Kent Peterson’s beautifully typed newsletter) 

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🤖 Horny Truth About AI Chatbots

I am clearing my backlog of Napkin Math posts, and found one more interesting piece by Evan Armstrong. 

In “The horny truth about AI chatbots,” he talks about a use-case of AI that is often unspoken. 

Pornographic chatbots are some of the most popular and profitable AI applications in use today. Mainstream chatbots such as ChatGPT and Claude won’t engage in sexual chatter, so a cottage industry has sprouted up to serve the good people of the internet.

He estimates that these services have amassed 5-8 mn active users already. But that’s not the only contour of human needs that are being served by AI bots. Evan expands further 

An even larger market is for adult emotional entertainment. These companies aren’t porn-y, but offer some variation on emotional fulfillment, allowing people to role-play companionship.

It’s this part that makes the post interesting for me. It offers a perspective of digital human interaction that we don’t think about much. Evan’s three key takeaway are great fodder for further munching:

1. Chatbots provide a new, incredibly addictive form of entertainment. […] AI chatbots have the potential to be more emotionally gratifying than human companionship because they are guaranteed to lead to responses.

2. We are still grappling with what it means to purchase emotions. [...] Companionships as a product moves us deeper into the objectification that social media and dating apps already encourage. Worse, the only capital required from these chatbots is fiscal, not emotional. They exist solely to please, and will completely conform themselves to your whims—in contrast to a real relationship, which pushes and stretches you with its demands. 

3. The attention economy still reigns supreme. [...] The more promiscuous your community content guidelines, the more advertisers will be reluctant to advertise on your platform (as Elon Musk is learning with X). I expect a similar dynamic to play out with chatbots—subscription-based models will become more common because the content is so hard to control and will so frequently push the boundaries of social acceptability.

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✨ Everything else

1. I loved glass sculptures by Norwood Viviano that show iconic city skylines atop emblems of local industry.

2. Josh Neufeld sees human faces in everything. Hats off to his attention. (via TAoN Newsletter)

3. You would have played 1st person or 3rd person video games. What happened to the 2nd person. Nick Robinson is a gaming nerd who cared to think about it. He has a very interesting dig at what a 2nd person video game might look like. Quite a fun watch, even if you are not into video games. (via The Flux Review)

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⏰ In case you missed last week’s post, you can find it here.

📚 Communities of Practice, Product-Market Fit Game, Pedestrian Experience, What It’s Like To Be

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That's all for this week, folks! 

I hope I've earned the privilege of your time.

If you liked this post, please hit the ❤️ below, leave a comment or share with someone who will find it useful too. It’s highly encouraging. 

Pritesh