Those of us who loiter at the intersection of economics and anthropology have many good qualities…except for the loitering part.
One of these is that we understand some of the dynamics that drive culture and commerce. This gives us a leg up when it comes to investing, and THIS gives us an opportunity to turn our active curiosity into cash, cash, cash! (As long as the academy continues to do a dreadful job understanding contemporary culture, we must find our own funding.)
Of course, we have to get better at reading and understanding the dynamics of culture and commerce, but as we do, we pull away from our chief competitor, the Wall Street analyst.
Pip Coburn offered a thought in this direction yesterday in his weekend newsletter:
We look to invest in situations involving monumental change. We look for situations where the pace of money coming into "the machine" to out of "the machine" will be materially altered. The underlying premise is that monumental change may lead to an immediate alterations of inherent value. If we are able to have clarity and conviction regarding the monumental change, we will be able to make money since Wall Street is poor at assessing monumental change but rather lives in a space of considering that change happens only incrementally. (reproduced by kind permission of Pip Coburn)
Pip’s newsletter is on restricted circulation, but see his recent book for a general statement of his view.
Coburn, Pip. 2006. The Change Function. New York: Portfolio. at Amazon here.
Conflict of investment declaration
I am a "change fellow" at Coburn Ventures.
As a Torpid Fellow associated with a private Laziness Institute, I’d like to restate the issue in the link. It’s not just that “most potential users are afraid of new technologies, and they need a really great reason to change.”
In my own lifetime study of stasis, I would say the more valuable metric in product design is a short and gentle learning curve. *User-friendly* is crucial, not least because of the emotional overtones of ambiguity and frustration (creating the scenario of being orphaned with only an enigmatic inapplicable instruction pamphlet for company). Too many new possibilities are schoolmarmy “assignments.” To tackle those requires an urgent and indisputable threat or need.
No doubt there are different temperamental threshholds in this matter, but in general I believe this to be true for a large segment, even including optimizers.
Make me want it, and *make it easy* (for the customer, not the provider). The latter purpose will reward ever-more-refined perceptual analysis, IMO.
agree with dilys and want to add that the most important function is to enable the end-user/consumer to SIMULTANEOUSY perceive the problem and the “new” the solution. Cheesy infomercials work well, and sophisticated CPG tech offerings often do not. None of it works well if the end-use AND/OR the “helper” (the package, some signage, a retail employee) do not understand the problem. That’s why Container Stores succeeds – their employees are trained to “pull out” the problem by probing and interviewing – by “caring” why the end-user is there in the first place. And that’s why e tailing works so well – the end-user starts a search with a fairly well-formed idea of what the problem is (although as search engine optimization gets better and better, the end-user may be able to be less and less conscious of his/her need). In any case, this user is really not an end-user this user is a “beginning-user” – already sold. The threshold has been lowered (perhaps eliminated) by the would-be user; there is no more TPPA. Yes indeed make me want it, and make it easy for me to “get” why I need it.
Well, I can’t say much for your competition. Seems to me they’re usually on par with a monkey and dart board. They focus so heavily on the numbers, they never think about little things like people and culture. There’s a whole big world out there outside of the spreadsheet.
There’s this little thing called the theory of efficient markets…ah, what the hell, we indexers don’t have as much fun as the speculative plungers. So find that Big Change! Just leave a little something in the safe portfolio.
Hehe . . . Steve, it’s not speculative at all. Grant simply has knowledge unknown to the market.
“Efficient market” Isn’t that an oxymoron? No, that’s “effective market” No, wait a minute, that’d be “market intelligence.” Oh, who knows…apparently the Shadow (and Grant) know. 😉