Matt Warren

Author: Matt

  • Finding Winners

    There are lots of stats out there about how many businesses fail. It is astounding that something close to 9 out of every 10 businesses fold in just a few years. With each of those businesses there are smart ambitious people with the best of intentions, plans, and money to get things off the ground.

    With odds like that it’s amazing anyone every tries to start their own business right?

    But from a different perspective, with those odds and the potential rewards of a success why doesn’t everyone keep trying to start businesses?

    Every time you tackle a challenge like starting a new venture there is a tremendous learning curve.. how to hire/fire, how to raise financing, how to balance sales and marketing, what are your strengths and weaknesses, what should be delegated or contracted out. Nobody has all these skills in grade 5. There are no naturals. Everyone needs to learn.

    With that context it’s easy to understand why early attempts to start something have a high likelyhood of failure. Most people need to learn by doing and it’s easy to make lots of mistakes before you’ve mastered the skills.

    If one out of every ten lottery tickets was a winner would you keep buying tickets?

    matt warren

    I think I’ve scratched off more than my share of losing tickets. But with each loser my confidence has improved in specific areas.

    I think I’ve got a winner on my hands now.

  • Training Your Mind

    The human mind is fascinating in so many ways.

    I often like to invision the brain as an input/output machine with some internal loops to self-reflect and generate its own internal inputs. Inputs to the brain come from our senses – what we see, hear, smell, touch. Those inputs will physically modify your brain as new memories are formed and core-beliefs are established. As a result of those inputs your brain will produce an output, you’ll move your body, say something, or think something.

    Every detail of those outputs from big ideas to micro variations are influenced by the inputs to your brain in the first place.

    Most people, including myself, don’t take conscious and critical consideration about what inputs we provide for our brains to process and build memories from. We passively consume TV, read the news and listen to podcasts or radio for the emotional and entertainment value.

    What if we specifically fed ourselves the kinds of information that would align with our goals, or placed ourselves in situations to learn and practice the skills we need to get better at the things we deliberately want to pursue. This kind of intentionality would be a game changer if applied consistently for months or years.

    So, I’m encouraging everyone to take care before they train their brain with random inputs from news sources, social media, video games, music, conversations, or TV shows. If training your brain on something is not going to be of benefit to you, decide to do something that is instead.

  • The Future of Work

    When looking at how automation, robotics and AI will change the future of how people work and what jobs they will have there seems to be two main camps of thought:

    Capitalistic/Free Market view that looking back at the history of economic transitions have shown that each time we faced productivity improvements there were always a corresponding shift in the labor force that maintains the level of employment. Somehow we transitioned from 90% famers to 2% during a great urbanization trend. Later, we transitioned to a largely industrial economy, and most of this industry is alive and well today. Constantly innovating and developing, materials and products are carefully produced using machinery that requires Induced Draft Air Cooled Heat Exchanger Units in order to operate at peak performance under closely monitored and controlled conditions. For our generation, a new industry has flourished as well, that being a knowledge and services one. Not only have we navigated those shifts and today have a relatively low unemployment rate, but compared to 100 years ago, women have entered the workplace. There are more people than ever with a job. The capitalistic view that this has held true since Adam Smith suggests that perhaps it is a universal economic law that will continue to hold in the face of the AI boom.

    The pessimistic view is that AI is different, that knowledge work is the last human product that we have to offer so once it is replaced by an AI there will be no jobs left for us to do. AIs will work all day and night, with better accuracy, faster and smarter than we ever could. The algorithms will chip away at our most demanding careers until one day we reach full unemployment and the world collapses.

    In truth, we have been living in a world of increased knowledge automation since the 80s. Software has been automating people out of a job since MS-DOS. And while software engineering is a significant industry that has absorbed a many of those people, not everyone has jumped ship to become a computer programmer. Just prior to the current pandemic situation, unemployment was at record low levels, despite 30 years of software automation.

    Where people have ended up I think is an indicator of the future we might have to look forward to as the programmers themselves are replaced by AIs.

    The major trends seem to be towards the gig economy, side-hustles, and contracting. Everyone young wants to be a youtube star, and I think the next generation is getting an early lesson in how to promote products. Patreon shows how people have been willing to send money to people who are producing interesting content. This seems like a universal. People will always be able to pay others to see them do something – play sports, video games, build crazy inventions, or simply tell their story.

    The economy will continue to function so long as people find reasons to send each other money.

    Unlike the impossibility of a 1950’s era farmer worker forecasting a future of software developers. Today, I think we can see what’s coming next. People will become natural sales people, refering customers using the same language they pickup from watching youtube and instagram. “smash that like button” or it’s evolution will become even more common as people become independent publishers in big or small ways.

    The future of work is that it will look less like a job, and more like ways we can earn money.

  • Canadian Manufacturing

    Over the last couple of months I’ve been giving some thought to how the manufacturing business works, specifically in Canada. It’s been driven partly from things that I’ve been trying to buy, partly from wanting to try my hand at small scale production of something in the garage and also because it’s such an important sector of the economy that’s been struggling.

    There’s an unintuitive mismatch of economic incentives for supply chains. Retailers often treat their suppliers as trade secrets, sharing information about where they buy products from can have several negative impacts. For one, if someone buys the same products they could become a direct competitor and start pushing down prices. Secondly, the supplier may have less product available for them if others start placing orders.

    Up the supply chain the same things continue to happen. Suppliers are tightly held secrets. If you want something you should buy it through the downstream company.

    In comparison, the chinese manufacturing industry has found a way to unlock these barriers to efficient commerce. It has become so much easier to find chinese suppliers that even for simple components like standard metric bolts I will order them all the way from Guangzhou instead of HomeDepot.

    Canadian manufacturing seems to need incentives that align better with the whole sector, and the national economy at large. It’s a bigger challenge than seems feasible for me to have any impact on, but nevertheless the mental wheels are turning to see if there is something that could make Canada make again.

  • Pace of Innovation

    Our ability to be productive is the most critical metric that determines quality of life. It’s a fundamental measurement of how the economy is doing, identifys where we are stagnating, and shows where the biggest gains are.

    There are many factors that go into improving productivity – capital investment in tooling, factories and better software, also education and training. Those examples all suffer from limits. With the best people, using the best tools and methods you’ll hit an upper ceiling of productivity that cannot be surpassed without an innovation.

    Here’s a story I heard about the UK cycling team. In 2002, the UK had an abismal record of only 1 gold medal in the previous 76 years. It had gotten so bad that not only did they have a difficult time finding a bike company to sponsor the team, but several bike companies actually requested that the UK team NOT use or be seen using their bikes for fear of being associated with such poor performance. However, in 2002 they got new leadership from Sir Dave Brailsford who focused intensely on innovating in every minute detail. They found new ways to shave weight from the bikes, new clothing, better diets for the athletes, improved routines, tested supplements, tweaked aerodynamics, and tried various greases and lubricants. Every possible variable that could be optimized was systematically researched for innovations and many of them eeked out small improvements of less than 1% performance gains. In aggregate however these small changes had an outsized impact and resulted in a dramatic turnaround from absolute failure to domination.

    Not only are the individual innovations important but the pace at which those innovations happen can quickly become a massive advantage.

    So what kinds of things can you do to increase the pace of innovation. Here’s some ideas:

    • shorten iteration cycles of build-test-learn-repeat
    • focus on quantity early on rather than doing it right the first time
    • apply project planning on what can be done in parallel
    • be creative at un-blocking people and their tasks – avoid being stuck waiting for external people/services/deliveries etc.
    • replace external dependencies with more reliable internal ones
    • reduce parts
    • simplify or eliminate processes
    • everything is wrong, it is only temporarily the best solution
    • look out for local maximums and have the courage to back out to try something better (one step back, two steps forward)
    • put things in place to reduce the time it takes to get a new person up to speed – good documentation, simpler onboarding
    • always try to find analogues in other industries
    • apply A/B or multi-variate testing where possible
    • know the goal, keep it in focus
    • calculate the fundamental limits
    • periodically step back to get a 10000ft view
    • periodically dig into the minutia
    • use the right words for things
    • make change easy
    • encourage ideas from everyone and everywhere
    • even small changes are worth doing

    I think it’s worth spending considerable effort on things that improve the pace of innovation. Leave a comment if you have more ideas for things that will accelerate innovation personally or where you work. I’d love to collect as many ideas as I can

  • Value of Vision

    In business, when talking about writing a business plan, or when a consultant evaluates a business, sometimes a vision or mission statement are things that get discussed.

    For a long time I have looked at these kind of things as fluff. It’s a bunch of people wordsmithing a document that will never be read outside of the announcement that it has been completed. YAY! The people writing the software, building the widgets and making sales are often scarcely aware that a mission or vision exists for the company they work for.

    In those cases, yes, a vision statement is less than useless. It is wasted effort, it might even conflict with the actual evidence of the company’s actions.

    But when used correctly, it can align thousands of people to all pull in the same direction. A great mission, can make people excited to work 80 hours/week, to jump out of bed knowing that what they do matters. It can get past the roadblocks to decision making by proving a roadmap to everyone about what they should or can work on.

    In the early days of Google, they had a mission to organize the worlds information. This galvanized an army of amazing engineers to build some truly monumental technology to store and find everything on the internet. It encouraged them to tackle projects like scanning all books, and re-think email. Google has long since outgrown that mission

    SpaceX is a company with the vision of having a sustainable colony on Mars. This ambitious goal underpins both top level strategy, and also bottom up decision making. People work there to be part of something amazing and as a result they are able to hire some of the smartest people.

    There is a reason why spaceX will not go public until after they reach Mars. The stock market doesn’t care about bold missions, they want quarterly reports that show revenue growth and profits. Looking at Google as an example, the pursuit of business growth for shareholders eventually resulted in the cancellation of many benefitial products. The justification of a project requires a solid business case that it must not only be profitable, but also big enough to be worth pursuing.

    All it takes is one bad quarter for some pencil pusher to call for the cancellation of a fun mission-aligned project. After a few of those, we stop believing that the mission is the mission. It stops being fun to work there, it becomes harder to attract the best people.

    The thing about making a vision or mission work is repeating it ALL THE TIME. Put it into every presentation, every memo, every email, talk about it in every interview. When people believe that the vision is real, that the company can actually achieve it that’s when the positive benefits of having a vision.

    As the leader of a company, only create a vision if you are going to do what it takes to make people believe the vision is real and possible based on the actions the company makes.

  • Ideas, big and small

    I have 3 big ideas. The kind of legacy making change the world ideas that are big and bold. These ideas are things I would pursue if I had the means to execute on them but it requires vastly more capital than I have access to, or that others would put me in charge of. And more skill than I have the ability to muster.

    Those big ideas are in the areas of construction, access to space and energy.

    To set myself up to achieve those things in the future I look at what other successful business entrepreneurs before me have done, and model them. It is common to have started with a more modest businesses and leveled up several times before developing the skills and confidence to achieve unreasonable success.

    This was on my mind recently. That before tackling the big ideas I need something that hits exactly the right level of challenge that I don’t get discouraged, but hard enough that I learn what I need, and that is within my means to succeed at. It would be an added benefit if success also brings with it the assets required to tackle a bigger idea next time.

  • The Last and Biggest Industry Primed for Tech Disruption

    The wave of tech disruption has been picking off industries one after the other since the early 70’s. Until today when it’s hard to think of any remaining sector of the economy that hasn’t gone through, or is in the process of being converted into a software driven market.

    The current biggest industry that is seeing major disruption is automotive and energy with Tesla taking the lead on a major shakeup to how cars work, and eventually with how the energy grid functions. This sector was a long time hold out due to the cost and dedication required to create a successful new car company. Should Tesla’s strategy play out they could find themselves with a global automotive monopoly on an $8T market.

    There is, however, an even bigger market that has not really been touched by technology discruption yet. It is long overdue for modernization and a shift towards software driven margins. Productivity in this sector has been essentially unchanged since the 50’s.

    Construction, and Housing is the biggest untapped market yet to be infiltrated by a technology company.

    Amazon is a technology company that sells books, Tesla is a technology company that makes cars and somewhere out there is an entrepreneur who will start a technology company that happens to build houses.

    What does a technology housing company look like?

    It will re-evaluate housing from first-principals – what is the ideal wall assembly? could you build a house with vacuum double-walled insulated panels? Would people buy a ‘branded’ home with a badge on the front? Could you provide home insurance as a service, have fully integrated smart electrical panel? an integrated thermal management system of heat pumps that moves heat from the freezer/fridge to the hot water tank? Could you change the perception of a home to be a computer you live in? Would it be possible to work with every jurisdiction to have these homes pre-approved for building inspections? biohazard protection level air quality filters, integrated security systems, off-grid by default?

    The ultimate house would be built to a tolerance of micrometers, and be produced at a rate of 100’s per day. It would be termite proof and impregnable to insects or rodents, the exterior would be zero maintenance.

    It would also be a general housing platform that, like Tesla, uses software to unlock the features you pay for so that manufacturing can be streamlined to fewer SKUs.

    Many of the existing problems with houses can be delt with – house insurance is expensive because a flood or fire can result in massive remediation costs. To counteract this, the builder should provide the insurance policy to the home owner – all claims are dealt with by the builder which provides the feedback loop to inform design decisions that improve future houses.

    The real differentiating factor though is going to be having a house that is software upgradeable and gets better every month with upgrades. If you could re-imagine a house as a software platform what kind of things would it do (that you don’t get with smart but dumb “smart home” systems)? perhaps a home that can play hide and seek with you, maybe it can find your lost stuff, talk to you in the room you’re in, lock all doors in the house, identify and trap intruders. maybe it would not require manual light switches, and it would auto-open doors for you. video and audio calls could follow you room to room. A smart home that makes being at home fun and social, or relaxing and serene with a single command. A house with a fart app.

    There is the need out there for order of magnitude better homes than what is currently constructed. Nobody has invented it yet. And to the company that creates the first computer you live in, they will have the chance at dominating a $13T market.

  • Current Thoughts on Software Testing

    When I was a younger developer I didn’t see the value in writing tests for the projects I worked on. I was focused on being as productive as possible during the day to turn out new features and fix bugs. Tests doubled or more the amount of code that needed to be written, it added delays and distractions waiting for tests to run, and sometimes they were actually very difficult to write (figuring out how to mock out things is not always easy).

    That approach works for a while, but has it’s limits.

    There are 3 main things that tests solve for me and it took a while to appreciate:

    1. It catches stupid mistakes earlier
    2. Improves ability to take on or hand off a codebase to new developers
    3. Helps stave off fear of making changes in the future

    Catching mistakes early is accomplished because, tests force you to think through some of the error cases, it makes sure that you’ve actually run the code before launching in front of users. I have come to see unit tests as comparable to double entry accounting in some ways – you write the credit and the debit separately, and then can do a validation step (running the tests) to confirm that both sides are in agreement. This is valuable but it is the least valuable of the 3 points that make tests worth writing. For non-critical software, and if it is quick and easy to identify and fix issues in the deployed software then it’s easy to see how fixing errors after the fact, and writing half the amount of code is a productivity trade off that has a strong argument.

    Being a developer that comes onto an existing project, having tests are a life saver. If you don’t know how to quickly identify and fix bugs, then every bug becomes a lengthy investigation. This process of having new developers have to re-learn how the existing software was built is one of the biggest cost factors in software development. The time it takes to understand how previous developers decided to solve problems in a complex pile of files can be upwards of a year or more. If the average tenure of a developer on a project is only 2 years before they are promoted or move to another project, then the company gets very little time of a developer working efficiently. At this point in a projects life, having tests improves the productivity of developers. Tests allow new developers to catch issues they wouldn’t have known about, helps them learn faster about why things are done the way they are, and reduces the likelihood of introducing a bug that takes a long investigation to diagnose and fix in unfamiliar corners of the software.

    As developers our job is to write software that adds new features and continues to provide value to users and that stays competitive. After a few big bugs have slipped through from lack of test coverage both developers and project managers will lose confidence in the ability to develop new things and make changes to the code. Simple library upgrades and security patches may be delayed or ignored for years out of fear of breaking things. When a team has fear of making software changes it can doom the project unless addressed. The ability to work on innovative new ideas is replaced with more mundane fixes and patching bugs. It won’t take long for things to get so out of date, so unmaintainable and so boring to work on that two things will happen: The best developers will jump ship and move onto more interesting projects and the remaining good developers will start to push for a re-write from scratch. This is a doubly bad spot to be in as a business. The parting developers take with them the knowledge and expertise that’s required to be productive leaving holes in the team that will require new people to relearn what has been lost. And secondly, the cost of a re-write can be massive and not viable, it’s risky and time-consuming. Not addressed, this will rot a project until failure.

    These are the lessons I have learned from working on dozens of software projects over 15 years about the value of tests. I started as a huge skeptic. It took a while, but I’ve come around to see them as indispensable.

  • Global Kick Towards Abundance

    The utopian future portrayed in Star Trek takes place is a post scarcity society where money has lost it’s importance and people more or less have the access to food, energy and housing they need to live as well as the freedom to acheive their personal life ambitions without worrying about where the next paycheque is coming from.

    We’re not there yet.

    But we do live in a time where technology is advancing very quickly, and around the forseeable corner is things like self-driving, automated factories, delivery drones and AI that could smash millions of jobs out of the economy faster than we can adapt. Technology is driving a deflationary effect that is causing prices to drop at an accelerating pace. This has been happening for a while now (though not always apparent) and the only way that the global finance system has staved off deflation is by printing massive amounts of money to counteract price drops. This has been critical to avoiding the situation where the massive amounts of debt in the world cannot be possibly paid off with future dollars that are more abundant due to inflation. For over a decade now, we have had near-zero interest rates and massive government spending attempting to goose some inflation, but it’s been less and less effective at doing so.

    The gobal situation with massive job losses, and work from home, lockdowns are a potential trigger that could cascade into a future where deflation finally takes over and prices start to fall. Suddenly people are being forced to use online shopping, click and collect groceries and finding out that there are a lot of products and services they don’t need. Stores may start to adapt by making contactless delivery the preferred way to purchase. and as a result start scaling back on retail presence. Ultimately the cost savings from this will turn into lower prices for consumers.

    I’ve always thought that things will transition to the point where ultimately the end-to-end creation and delivery of a product will not require humans in the loop – automated mining machines composed of high-quality mining equipment parts or farming or tree cutting will deliver materials to factories built and operated by automated robots, powered by electricity from solar panels made and installed by robots. The only scarcity will come from patents, information access, and land-use.

    What would happen to the cost of electricity if robots could turn sand into solar panels and ship them to your house with zero humans required? What if the robots were open-source designed and mostly 3D printable?

    Despite the unprecedented amounts of money that governments around the world are using to keep the current system going, I’m not sure it will be enough to restore consumer confidence and get people back into their old habits of spending and borrowing and investing. Time will tell if the current experiment with helicopter money directly into people’s pockets keeps things rolling forward for long.

    Right now millions of people are finding ways that working from home can be productive. Businesses are going to be looking at the productivity benefit of having office space and many will come out of this forced work from home with a realization that the ROI on office space is not worth it in some cases. retail shopping will take another shift towards Amazon for everything.

    We will have perhaps a year or more of people investing in ways to continue operating their businesses without needing to have people interacting with eachother with physical proximity. These investments will accelerate towards more robots and drones.

    The march towards abundance is unstoppable. Staving off deflation will necessarily fail at some point as a result. This current crisis will be the kick that forces a re-think of many of our most established institutions and accepted norms.