The shape of COVID-19: NYC’s testing data to date

On the eve of Phase 2 reopening in NYC, New Yorkers have a lot to look back on and a lot to look forward to. Since the start of the pandemic, between 8 and 11% of confirmed and suspected NYC cases ended in death. At the same time, the total number of confirmed new cases was only 81 on June 19th and has been declining across the city. So as we ready ourselves for reopening, we need to take a look at the trends to answer that burning question: is a haircut worth the risk just yet?

COVID-19 data. Source: nyc.gov

One month ago: A tail of three cities

One month ago, when Mayor Cuomo extended NY “PAUSE” and postponed Phase 1 reopening to May 28th, New York got a signal that we were still in the danger zone. But why? Our R0, the rate of contagion spread, was consistently below 1 (the critical threshold). A look at the data shows that quality of our data and, thus, our ability to accurately estimate the true R0, varied widely by neighborhood.

Comparing just three different parts of the city — Chelsea/NoMad, Flatbush, and East New York — points to very different testing trends. These neighborhoods could be fairly described as high, medium, and low income, respectively. While Chelsea and NoMad (zip code 10001) saw the total number of tests per day rising from April 1 to May 20, Flatbush and East New York (zip codes 11203 and 11239) actually saw their daily testing rate *fall* during the same period. Although the number of positive cases dropped steadily over time in all three areas, the rate of change (indicated by the line graphs) for testing and positive test cases trend downward together in Flatbush and East New York. This suggests under-reporting of cases. The Chelsea and Nomad rates of change, by contrast, show an acceleration of testing and declining growth in positive diagnoses. With bigger sample sizes and more data points, we can confidently say Chelsea and Nomad had falling R0s.

Since Phase 1: More universal testing and better results

Today, looking back on the two weeks since Phase 1 began, there are sustained signs of improvement. Across our three sample zip codes, we saw total case levels flatten while total testing continued to increase, giving us confidence that our R0 was truly falling across the different locales.

Chelsea/Nomad, Flatbush, and East New York all saw significant growth in testing during Phase 1. As total tests grew, the total positive case curve continued to flatten. Source: James Wallace’s analysis of of gov.nyc health data

The data indicate that targeted interventions in areas like East New York meaningfully boosted the rate of testing. Whereas testing rates hovered around 30 per day for all of April and May, for one day in June, shortly after Phase 1 reopening, testing jumped to about 150.

These signs bode well. So should we be encouraged? On balance, yes. Even in our biggest recent gatherings, the Black Lives Matter protests, protesters have had each other’s backs, wearing face masks and gloves and offering hand sanitizer. There may be pockets of regression as Gen Zers flock back to bars sans masks, but with new cleaning and hygiene norms everywhere, I remain cautiously optimistic that our city will heal.

Today: Still worth taking a different “PAUSE”

Despite the positive recent trends, the aftershock will be felt for a long time. Nearly as many New Yorkers have died from COVID-19 as live in the 10001 zip code. But very few of these deaths were in Chelsea and Nomad. Flatbush experienced hundreds of deaths, and East New York experienced seven times the number of deaths per 100,000 that Chelsea and Nomad did.

Source: nyc.gov

It is worth pausing to think through what exactly needs to change in order for the darkness of a pandemic case map to not reflect the darkness of neighborhood residents’ skin.

Source: nyc.gov

Top five post-COVID-19 predictions

How will COVID-19 leave society changed?

New York’s new normal

Each day as I step outside, keeping at a social distance, I am reminded of how not normal New York City life is right now. Empty sidewalks, save for the homeless and a few runners. Wary looks behind masked faces. Empty roads and fresh air. Supply shortages and long grocery store lines, for those who brave them. A sudden interest in the movie Contagion. This is the new normal. And when this passes, I wonder, what will the new new normal look like? I offer five predictions about how society, government, and individuals will change — or not change, as the case may be:

  1. Niche media will become more mainstream than mass media
  2. Everyone will emerge with a new survival skill
  3. Asthma cases will drop, as the air quality improves with less pollution
  4. Both parties will take the crisis as evidence that their principles are the right ones
  5. Social activism will see a significant jump

I predict these changes, because they are already underway. Here’s what I’ve observed in the last few weeks of quarantine:

1. Niche media will become more mainstream than mass media

John Krasinski and Steve Carell, Some Good News, Episode 1

In the early days of corona virus news, national “reporting” was a loose term — you could read article upon article and learn almost nothing. As the severity of the situation became clear, hand-wavy vagaries just weren’t enough to keep us informed about how to stay safe. My peers and neighbors quickly started relying on a narrower set of localized and trusted sources for the intel we needed on the pandemic. The Daily by the New York Times became the most pervasive, providing a combo of expert advice and front-line reporting. As New York became the epicenter of the U.S. outbreak, and no national support emerged, Gothamist emerged as one of the best sources of informative and actionable coverage. They gave locals a source of food security by reporting on Baldor, a restaurant supplier turned direct-to-consumer, with higher quality and better prices than anything on Instacart. The TLDR from national news outlets, by contrast, was just ‘food is getting harder to buy… countries should do something about that.

The same-y-ness, shallowness, and sensationalism of mainstream news has spurred other niche counter-movements in media. Some Good News with John Krasinski has brought the local global, featuring positive COVID-19 stories of hope, solidarity, and recovery from around the country and the world. He’s married curated, hand-made content contributions with global icon pop-ins, notably Steve Carell and Lin Manuel Miranda. At 16 million views for Episode 1, SGN’s popularity has blown every prime time show out of the water. In effect, channels like SGN are making YouTube more mainstream than ABC or CBS.

2. Everyone will emerge with a new survival skill

First quarantine-inspired, homemade bread

All the twenty-somethings of New York have discovered their kitchens, perhaps for the first time, as take-out has become more of a luxury than a norm. “I’m confident we can survive the apocalypse now,” my husband smiled, with a sigh of relief, when our 50-pound flour order arrived from a Queens wholesaler. He made his first-ever homemade bread. I have picked up running and stair climbing in lieu of a gym, and could easily make it to any bridge of the island if needed. All we need now is to take some streaming karate lessons, and we will be ready to kick some zombie butt if a worse kind of outbreak happens.

3. Asthma cases will drop, as the air quality improves with less pollution

U.S. cities with the best and worst air quality, Realtor.com

Few cars on the road and planes in the air doesn’t just mean we can wander the streets and tarmacs unfettered. It means we can breath deep and feel refreshing, mountaintop-quality air, even in the middle of New York City. This can only be positive for children as they develop. As an urban-dweller who developed chronic rhinitis at a young age, I can’t remember what normal breathing feels like. While some argue impaired smelling is a benefit in New York City, I still hope young New Yorkers today continue to reap the benefits of our reprieve from pollution. In a dream world, we would mandate the sunset of combustion engine vehicles and allow only electric vehicles within city limits. I won’t hold my breath for New York to be the vanguard of new clean air policies, but maybe California can pave the way.

4. Both parties will take the crisis as evidence that their principles are the right ones

Massachusetts Senators Ed Markey and Elizabeth Warren, WGBH

In response to the coronavirus crisis, Republicans and Democrats alike have taken refuge in their respective ideologies. Conservative groups have mobilized to demand that the U.S. re-open the economy, while liberals have reminded us that people *are* the economy. The GOP’s economy-before-people stance has led to a temporary demand for big government, but no significant shift in their social safety net policy stances. Democrats, by contrast, consider this crisis as evidence that our safety net policies are already far too weak. While the 2020 election campaigns are essentially on hold for now, I expect to see renewed campaign efforts in the fall that will amount to a battle of ideologies for what we want post-COVID-19 America to look like.

5. Social activism will see a significant jump

Change.org highlights COVID-19-related petition victories

This crisis has led to a number of spotlights on companies and institutions reaping concentrated benefits while trying to pass on the pandemic’s costs to the larger populations they serve. WeWork is still charging tenants in cities with shelter-in-place orders. Amazon fired a protesting employee who called out unsafe working conditions following a streak of in-warehouse COVID-19 cases. When the stakes are life and dealth, right and wrong become fairly black-and-white. It also gives people more to fight for. We’re seeing more masses of people taking action. Millions have signed petitions through Change.org, and many more are organizing and making their voices heard. I expect this momentum to continue as the aftershocks of the crisis continue to reverberate.

Predictions unfurled

For better or for worse, this crisis will have a long tail, not just through the presence of the virus, but also in how our society is changed by the crisis. The five trends above are already under way, and will build as we adapt and reshape our social systems in the wake of COVID-19.

Scaling company culture with AI: an interview with George Swisher, CEO of LiiRN

Can AI help foster cohesive community in an organization? LiiRN thinks so.

Source: Simplilearn

Creating a healthy work environment that scales is something of a holy grail for all growing companies. As internal networks become more dispersed and organizational structures grow more complex, it becomes easier for communication disconnects to occur. How can companies continue to cultivate a shared vision and culture, and give employees a chance to define and improve both? LiiRN CEO George Swisher thinks the answer is AI-driven.

Swisher founded LiiRN, a people-centric, AI-powered transformation software, in 2018. The AI platform has a two-fold purpose: to help leaders make decisions based on employee feedback, and then allow employees to participate in enacting those decisions. The LiiRN platform collects customized survey data on leadership performance and company priorities. The AI synthesizes upward feedback, converts it into leadership performance ratings, and identifies quantitative and qualitative trends and findings to inform decision-making. The platform also invites self-nominated change-agents to shape and drive forward company-wide initiatives.

In an interview with Swisher, he shared how AI can drive rather than reduce personal connection, and help business leaders to listen to and lean on their people.

What problem are you solving with LiiRN?

LiiRN aims to help companies drive change through people versus processes. Many leaders working to design strategy end up working with small populations of people, doing surveys or doing stakeholder interviews. But trying to drive a huge change with the input of a small group of people is a disservice to both the firm and the company. People are fearful of change when they don’t understand it. So a few years ago I thought, what if I had the ability as an individual consultant to work with all hundred thousand employees in real time? The impact would be tremendous.

And so the idea was to launch a software that could do that, that could physically touch people as if it was someone you knew and who understood the big program that was going on out there and help the employee relate. When you drive change from the bottom up instead of from the top down, you avoid the education and awareness gaps that come with large scale change.

Companies can use our technology as kind of a middleware between the leadership and staff, to find the gaps between what leadership thinks and what the people on the ground are actually seeing and thinking. Our voting feature makes people feel like they’re part of the decision-making process. If you can do that for a company, say, that’s 100,000 employees, you’re able to help 100,000 employees feel like they’re contributing to a decision that the leadership is making. You get people who are more empowered, and I think that’s a big emotional feature of how you activate people. It automates some of the change management processes and helps leadership make decisions and investments that their company believes in. With ongoing feedback collection, you can create a dynamic feedback loop, to continually shape the change journey.

What are some of the most common pain points the leaders you work with encounter?

New leadership teams are sometimes nervous to listen to data and to draw conclusions if it can be interpreted in multiple different ways. It’s one of the reasons that we have moved to partnering with consulting firms with expertise in software-based data analysis. We use the data to quantify how many people activate and why. Typically, we see north of 30% of the total population raising their hand to be on a work stream in a specific change management area.

If you have lower adoption, we use the data we collect to understand why. We track when people opt out or say “I don’t understand what you’re asking and talking about.” This feedback surfaces whether the real issue is understanding and awareness, versus the willingness of people to participate. Alternatively, the data can also show if people think the initiative is misguided or has implementation risk. Leaders gain transparency through the software’s data analysis.

It sounds like you’ve found ways for AI to create more human interactions. What are the limitations to leaning on AI? In what ways can AI tools be anti-social, and how do you mitigate those risks?

If you’re going to trust the output of our system, you have to know it’s based on the right input. Potential biases to data come in so many different forms. Ideally, if we look at, for example, who is in the sample population that you’re getting information from, we’d account for any skewing as we analyze it. We have limited control, of which population, the stakeholder at the enterprises chooses to invite into our software. So if they choose to only involve the US population and use that information to influence the way they make decisions for their Asia-based population, for example, that clearly creates a lot of challenges, given the cultural differences. We work to screen out and limit bias with some of our onboarding screens and some of the setup and training that we do. We promote as much as we possibly can an approach of widening the sample size, to make sure that you’re involving as large a population as possible that is as diverse as possible. But there’s definitely limitations to it. It’s hard to solve it when you’re collecting what others choose to input.

Also, if there is a high concentration of a certain demographic in a company, we can’t control for who they’ve hired. So if they’re only getting information from a specific group of people that’s the majority of their population, it clearly sways the input that we’re getting and the resulting outcomes. So for us, I think we’re trying to maintain a middle ground where we highlight who companies are asking for input from and how it impacts the output. 

We’re focused on making our data inputs more comprehensive by integrating with more internal systems in our upcoming work. HR systems can provide added layers of data, like performance management data and learning data; systems like NetSuite provide more business performance data. The more that we can integrate, the more our machines can learn, and the more we can build better cases for the viability of the decision we’re recommending.

Change management in the context of technology often raises the specter of worker displacement. How can technology-based change management tools like yours help us prepare for an unknown future of work?

What I learned personally moving from a tech-enabled service businesses working with big enterprises to being a full software company is that technology isn’t replacing us. There is a fear of tech advancing too fast. But I think the bigger question is how do we reskill and retrain ourselves? And how will we hold the enterprises of the world responsible for managing change? Even if there are people who will be losing jobs, which is never a good thing, we have the opportunity to say, “Well how do we rethink what workers are doing and what new skills they need to adapt? And how can we help them do that?” Yes, we’ve introduced self checkout into the grocery store. But if we’re going to replace those people, what are the skills they have that we can still benefit from? They may be really great at customer service and customer success — can you retrain them to help people shopping inside the store, to create a personalized experience? Flipping the way that you look at it can help people understand the opportunity. Then we all advance. But a lot of companies don’t think that way when they’re developing or implementing automation technology.

It’s a large number within consumer retail and manufacturing — upwards of 70% of some of the largest companies and employers in the world — whose jobs will be automated away in the next 10 years. The magnitude of that is scary. Unless you retrain people to think about it as an opportunity and change the way that they’re actively pursuing alternatives, we’re going to have problems. Being a coder isn’t the answer for everyone.

Tesla is the new Starbucks

Making the common uncommon

There are few companies that manage to define a market, and even fewer that manage to re-define a market. Consider two companies that have turned necessities into luxury products with powerful brand equity: Starbucks and Tesla.

Starbucks developed a masstige product in a previously commoditized category. Morning commuters went from 50 cents Styrofoam cups to $5 shmancy coffees as part of their daily routines. Tesla is carving out a similar growth path by redefining the electric vehicle (EV) market and the automotive industry more broadly. Tesla introduced luxury to a product category previously seen as an R&D experiment. Over the last decade, EVs have gone from virtually non-existent to widespread, with roughly 1.2 million on the road in the U.S. — and a big chunk of those are Teslas. The two companies are on a similar trajectory, and for similar reasons.

The parallel paths of Starbucks and Tesla

Starbucks and Tesla are on track to achieving similar market share in the U.S. Tesla announced in their Q4 earnings call that they expect to sell over 500,000 vehicle in 2020. This 50% bump in year-on-year global fleet growth will position Tesla to gain market share of the U.S. EV market comparable to Starbucks’ share of the U.S. coffee market.

Source: Statista, EEI, MBA in the City analysis

How are these two companies landing in such similar places? It has to do with the two key strategies they share:

  1. Delivering superior user experience
  2. Establishing strong economic moats

With these two cornerstones, both companies are not only leading their categories, but also positioning themselves for long-term success. But don’t take my word for it. Let’s look at the facts and figures that are proving out their strategies.

1. Superior user experience

Starbucks and Tesla have each created superior user experiences that are entwined with their brand identities — in large part because those experiences departed from what was seen as possible in their markets.

Starbucks has defined the category of quality coffee by created a seamless, pleasant customer journey. From app orders to friendly baristas calling your name, the familiarity of a Starbucks PSL has a tug that brings in customers in Hawaiian Septembers. (I speak from experience). Starbucks’ category-defining success has been proven out by their dominance in the premium coffee market. As artisanal “hipster coffee” shops have sprouted up, consumers can find a multi-sensory coffee experience within walking distance in any U.S. urban center. Now I can get oat milk flat whites with a dusting of cinnamon just about anywhere in the Big Apple. Yet even as boutique cafes have emerged across NYC, many people still go to Starbucks, because they are reliable. As an early mover in premium coffee, Starbucks effectively defined what people expect and want.

Similarly, Tesla has shaped what people want in an EV. The Model S was the first to prove that electric vehicles could offer speed and range, creating brand cache and infrastructure that other companies, like GM and Ford, are unlikely to catch up to. Tesla is also positioned to grow brand loyalty because they perform as well as leading sports cars and are easier to maintain, creating an overall better user experience. EVs have fewer moving parts, so less things can break. For example, an Audi A5 costs almost 7x as much to maintain as a Tesla Model 3.

Compelling user experiences for both companies have resulted in significant earned media. Tesla’s sports models have earned the EV spotlight, with the most media notoriety of any car company, despite having zero marketing spend. Starbucks, in a similar vein, has steadily decreased marketing spend over the last decade. They don’t need the marketing, because both brands have become synonymous with their categories.

But what is to stop either company from losing market share to “me too” competitors, I hear you ask? The answer is economic moats.

2. Strong economic moats

An economic moat refers to a business’ ability to maintain competitive advantages that protect its long-term profits and market share from competitors. The critical mass and vertical integration of both Starbucks and Tesla have created operating efficiencies and economies of scale — both significant economic moats.

Starbucks boasts vertical integration from bean to cup. They work directly with nearly 300,000 coffee growers around the world to ensure quality and flavor standards, as well as sustainability. Full vertical integration makes their supply chain less susceptible to disruptions. Its automated supply chain monitoring also enables responsiveness to operational changes — ensuring that their 31,000+ stores globally are never short on supply. With this scale and integration, Starbucks has even left Dunkin’ in the dust.

Tesla is also vertically integrated. They recently doubled down on a piece of the supply chain that will drive (pun intended) the most critical competitive edge an EV can have: battery life. Tesla’s bleeding edge in-house battery technology will soon halve the number of charging station trips needed. These swift advances are likely a result of their Maxwell Technologies and HiBar Systems acquisitions in 2019. In its latest battery patent, Tesla noted that some battery formulas “doubled the number of cycles (or recharges) the battery could take while keeping the same 95 percent capacity retention.”

Tesla customers are willing to pay for this quality guarantee. While other electric vehicle manufacturers worry about losing tax credits, Tesla unit sale remain largely unaffected. Tesla hit their max tax credit qualification of 200,000 vehicle sales in 2018 — but this did not dampen 2019 sales. Tesla remains as dominant in its category as Starbucks is.

What can we learn from Tesla and Starbucks?

  • Customer experience and quality are huge differentiators in consumer categories with historically low performance.
  • Raising the customer experience and quality bar for a common product (like transportation or caffeine) can create foundational brand equity and drive market dominance that is hard to displace.
  • Providing exceptional experience will drive your NPS, and you will have a highly defensible market position.
  • Economic moats cement the victories of customer loyalty and turn them into sustainable businesses.

New Yorkers are crazy, at least according to social psychologists

Emergency!

Last Sunday, at Delancey and Norfolk in the Lower East Side, an SUV ran over a pedestrian, trapping her underneath the vehicle. A dozen men ran over, gathered around one side, lifted the two ton vehicle, and dragged the victim out. Psychologists would predict that in most instances bystanders would remain just that. Yet the opposite happened here. Why were New Yorkers’ behaviors so counter to predictions?

The Psychology of emergencies

Most emergencies that affect only a single person in a large crowd are subject to bystander effect and aversiveness. Bystander effect, or bystander apathy, is a social psychological claim that individuals are less likely to help a victim when other people are present. In fact, the greater the number of bystanders, the less likely it is that anyone will help. Think of the accident where you wondered if anyone had called 911. Aversiveness is how unpleasant a stimulus is. Psychologists predict that the worse the accident, the more distracting it will be. Think of all the rubbernecking that occurs near traffic accidents. Yet neither bystander effect nor aversiveness occurred in the scenario above. And this may be because of some particular countervailing psychological forces at play.

Why New Yorkers help

A cynic might say that all the good Samaritans in the video where fit young men who were excited that their diligent workout regimen had finally paid off – they had a moment to shine! But I think there was something deeper going on.

I think there is a group cohesiveness that comes with being a New Yorker. We have a silent agreement collectively that we want our city to be full people with hustle and who love the place we live in. If something breaks our flow, we step in to correct it. I’ve been a part of these moments. I watched someone’s moving boxes spill across a crosswalk in a busy downtown intersection. Feeling alarmed for the girl and mildly horrified that these belongings would block rush hour traffic, I rushed to move some to the sidewalk, and everyone around me did the same. The road was cleared before the light turned green, and we all went on our way. Daniel Odescalchi shared similar stories in “The accessibility of NYC hearts: The view from my wheelchair“.

It also isn’t surprising to me that everyone immediately disbursed from the SUV scene, without waiting around for an emergency responder. I suspect that New Yorkers experience less intense emotional arousal in emergencies. We see so much craziness on the streets and subways, that we are more accustomed to disengaging and moving on to what, for most people, is out of the ordinary.

Keep it a secret between you and me, New Yorkers are actually nice. And resilient. We as New Yorkers have a shared sense of what is right that we can all fluidly work towards for our people and our city.

Best Brands of the Decade and their Key Strategies

“I don’t know what you do, but you do it well.”

Duffy, “Mercy”

The appeal of companies that have taken over the zeitgeist can sometimes feel like Duffy’s “Mercy” – you get sucked into their orbit, and suddenly find you *like* them, inexplicably, like a trusty companion. Looking back at a decade of big winners, winning product strategies that turn consumers into tribal advocates have common threads that fall into three categories. All can land a company on the map, but only some of have resilience in the face of change. The three strategies are:

1. Think in an ecosystem
2. Define the category
3. Make it more than the ordinary

Think in an ecosystem: Apple, Tesla, and Amazon

Source: Insider Monkey

Having a good product is, well, good. Having many good products that complement each other with smooth interoperability is even better. That’s ecosystems-thinking: figuring out how to make synergistic products that seamlessly integrate, to drive market domination.

Seamless like Apple

Apple was among the earliest companies to develop a suite of products that talk to each other. From Mac to iPhone to iPad, each could airdrop files to each other and sync your favorite music. Now with Airpods and iWatches, it’s simply a pain for Apple users to add non-Apple devices to the mix. As a consequence, success in one category – the iPhone – begets success in other categories – iPads, Macs, and iWatches. As users become enmeshed, switching costs rise. And as Apple stays cutting-edge in their leading category, there is even less incentive to switch.

Synergistic like Tesla

Tesla takes ecosystems-thinking to the next level, because they are deploying complementary products at massive scale. It started with their electric vehicles (EVs) and Supercharger stations. Next were Powerwalls and solar panels, allowing people to charge their cars at home and also supply their own day-to-day electricity. Most recently Elon Musk broke ground with the Boring Company to start a high-speed underground, EV-only tunnel to circumvent Los Angeles traffic. Tesla’s products are so well integrated and high quality that it will be hard for any competitor to take a piece of Tesla’s pie anytime soon.

Ubiquitous like Amazon

Amazon is not just the “everything store” anymore – they’ve also become the everywhere store. With the acquisition of Whole Foods, Amazon gained 450 stores in 42 states to offer pick-up lockers for Prime Members. Whole Foods has also become an ever-present marketing channel. I am regularly asked at checkout if I’m a Prime Member, and flashed deals for consumer staples as bait. Further, with Prime Video, billboards and subway ads remind me that I can’t watch Season 3 of The Marvelous Mrs. Maisel without Prime. I have a strange sense of “missing out” without a membership. The reach of Amazon’s ecosystem makes me want to join the club!

Whole Foods is in 42 states. Source: Inverse

Creating a full ecosystem is a highly defensible market strategy if you can pull it off. But most companies just have one thing they do very well. And a single concept can drive a winning strategy, as the following two examples show.

Define the category: Uber and Starbucks

One of the biggest signs of market domination is when a company becomes category-defining, providing standard-setting leadership that make it a reference point for any similar enterprise. Most big winners have done this by creating a new market where none existed before.

Ground-breaking like Uber

Uber has changed the way businesses think by creating a market-clearing platform where none had been conceived before. They achieved network effects that set the standard in their category — so much so that people say “let’s get an Uber” even when they mean Lyft here in NYC. Calling your startup the “Uber of X” is universally considered a selling-point. Startups are invoking Uber’s ability to capture first-mover advantage in a scalable, profitable way.

Benchmark-setting like Starbucks

Nowadays, “Let’s find a Starbucks,” is a common refrain in any airport around the world. Starbucks has defined a new minimum quality expected for a coffee, so much so that people are willing to spend $5 on what used to cost 50 cents. By carving out a masstige segment in a previously commoditized category, Starbucks opened the door for artisinal “hipster coffee,” shops, expanding the culture and experience surrounding coffee. Yet even as boutique cafes have emerged across NYC, many people still go to Starbucks! Because they have defined their category. Their first-mover advantage has allowed them to build a permanent association in consumer’s minds with consistent quality.

Of course very few companies can be a first-mover in their category. A few companies this decade have figured out how to be a great late-mover, as the final examples show.

Make it more than the ordinary: Allbirds and Away

Even a commoditized product can be a huge hit — by being more than just a product. Powerful brands can make everyday items feel extraordinary, as Allbirds and Away figured out how to do.

Sustainability with Allbirds

Allbirds came on the market with a message of sustainability at a time when the Paris Climate Agreement had been junked by the U.S. “Buy our comfy sneakers, and you can help save the planet,” was the implicit message. And it seemed to work! A quarter of my office had a pair at one point, and their brick-and-mortar store in the West Village is brimming with shoppers.

Wonder-lust with Away

Source: Away

Away quickly carpeted the NYC subways with images of chic travelers and a simple anecdote that many could identify with: arriving after a long journey with a dead cell phone. Their image of the tech-forward, boundless traveler struck a cord that has left them ahead of many “me-too” suitcases with battery slots.

Winning Big vs. Staying Big

When looking at the decade-defining brands above, they each represent something quintessential about the modern consumer economy and what works. Ecosystems of products are convenient to the point of become part of a lifestyle. Single products can also be powerful by carving out brand-new categories, or by digging down to a purpose beyond the product. My prediction is that the order of the categories above will reflect their. Making an ecosystem creates the stickiest customer relationship. Defining a category also guarantees a long company life, though with low switching-costs. And being more than ordinary will certainly give you a grand entrance to the consumer market, but perhaps not sustainably.

How to Split the Dinner Bill: Should Millionaires Pay More?

Recently I was listening to an episode of the Slate Money podcast where the hosts had an argument that really caught my attention. It was about who pays for dinner in a mixed income group, and it went something like this (very paraphrased):

Felix Salmon: You expect your friend to pay for dinner because she’s rich?

Emily Peck: Yeah, she has like 500 million dollars! Of course she pays. I offer to pay if she’s OK with going some place more affordable.

As I listened, at first I was a little surprised at Emily’s confidence in flouting what is an unspoken taboo at most dinner tables. Yet Slate Money’s extreme example of millionaires with thousandaires was actually one I have found myself in, and so it seemed worth taking a second look at my thinking and the beliefs underlying it.

In New York City, proximity creates cross-class interactions in every-day life. With Section 8 government housing opposite million-dollar mansions, and millionaires taking the subway with working Joes, we are organically a part of each other’s day-to-day. I’ve met every kind and class of person in the City, and have had the pleasure of meeting a few people in the “Two Commas Club” that have become good friends. And when I go to dinner with them, I want to pay for myself. Why is that?

Splitting the bill equally vs. equitably

On an interpersonal level, I don’t want wealthy friends to feel imposed upon or used. But Emily has forced me to ask, is a friendship really about equality, i.e. everyone paying the same, or equity, where each person contributes what they uniquely have to offer? If the latter, then in the dinner scenario that is purely about dollars and cents, shouldn’t the wealthier person pay more in proportion to their income? I’m surprised to find myself uneasy with the idea that my rich friends should pay more of the dinner bill when I have no problem with the idea of them paying more in taxes.

Source: Interaction Institute for Social Change

Dinner bill math as a microcosm of economic policy

Our current unease with wealthy friends picking up more of the dinner tab translates directly into the Republican line of thinking: that each person should look after themselves, and if they can’t afford to eat out, they should go without. Simply put, everyone should pay for their own dinner. This argument ignores context: it’s easier to pick yourself up by your own bootstraps if everyone has similar incomes and similar access to opportunities. Thus, it’s easier in single-class circles for each person to pay their own dinner bill. But that’s not the scenario many people find themselves in in New York City.

Getting comfortable with the idea of the wealthy paying more for dinner requires a more liberal paradigm. From a liberal perspective, there are different levels of economic responsibility for public goods, depending on your wealth. And sharing a meal with friends is, arguably, a public good, a microcosm of pro-social economic policy. At the dinner table level, the wealthy paying more for meals would lead to more diverse life experiences through cross-class friendships. These benefits, one could argue, ultimately pay for themselves in the form of a more functional society.

The alternative for the wealthy is relative social isolation — which under our current paradigm is the path most often chosen. The rich feel more socially isolated today than ever before as income inequality has increased. On the flip side, the positive externalizes of the wealthy paying more for meals have actually already been measured: namely, through free school lunch policies. Free breakfast and lunch leads to stronger student performance and, thus, stronger long-term productivity for the economy.

Systemically better results

One might argue that there is a risk of creating reliance on the wealthy that undermines relationships and self-reliance. It’s why parents stop paying for their adult children, even while parent incomes are typically greater. Yet the liberal paradigm isn’t trying to put parental responsibilities on the wealthy. It’s simply trying to systemically produce the best result and best opportunities for the most people.

So this holiday season, as you catch up with friends over cozy meals, think about what norms you want to have. And share with me what you think: should rich people pay more for dinner the way we ask them to pay more for taxes? Tweet at me: @mbainthecity

Top 10 mental models for the workplace

 Source: Litmos
Source: Litmos

“Our life is frittered away by detail. Simplify, simplify.” — Henry David Thoreau

Mental models allow us to simplify our complicated world. They are abstracted truths that, in finding the through-line of many instances, despite losing detail they are actually more true than any individual instance. They are powerful drivers of our behavior that help us quickly choose what to focus on and how to make decisions. So it’s worth taking a conscientious look at the ones that have baring on our day-to-day, and consider how we want to employ them.

Based on the Farnam Street list of 109 mental models, I have selected the top 10 that I have most often needed to revisit in innovation and strategy consulting work. They roughly fall into the categories of planning, process, and people – the raw ingredients of any initiative or organization. Below is a brief description of each, and why they are perennially relevant.

1. Planning

Whether planning for your company or your client, managing complexity and collecting the right level of input to make informed decisions is a critical skill. And it is also a complex thing to try to optimize. Here are a few mental models that help guide my focus and sense check my thinking.

The map is not the territory

A map is intentionally designed to be a reduction of what it represents, and is not to be confused with a full representation of reality. As George Box famously noted, “All models are wrong but some are useful.” To preserve the utility of maps, we must guard against over-simplifications that loses touch with reality. For example, average is a myth when it comes to clothing or car seats – acknowledging this has spurred the universal design movement, which demands a much deeper understanding of users than summary data can provide. Which leads us to our next mental model…

Seeing the front

The military has a leadership norm of “personally seeing the front” before making decisions. When decision-makers establish a ground truth first-hand, they avoids losing touch by over-relying on data that fails to capture the nuances of real life. As Jared Belsky would put it from a business leader’s perspective, “Get out of your ivory tower and into the stores.” Then you can test and validate your ideas, assumptions, and plans directly.

Second-order thinking

Second-order thinking involves thinking beyond the immediate effects of an action to the knock-on effects. This kind of holistic thinking needs to be balanced against the typical interpretation of Occam’s razor, which posits that the simplest explanation is most likely the correct one. Occam’s razor is not a call to give up critical thinking, but does call us to put more weighting on simpler explanations.

Tendency to overgeneralize from small samples

Overgeneralization occurs when we take a small number of instances and come to a general conclusion from it, even if we have no statistically sound basis for it. This is tricky to navigate if you are in situations with naturally low numbers of instances. In these cases, I try to validate my conclusion from multiple angles, and am highly open to updating my thinking as new information becomes available.

2. Process

A plan cannot manifest without an effective process to execute it. At the same time, process has many opportunities for minor or major misalignment that can limit both team outcomes and progress towards larger goals. Below are several key process-related mental models that, if applied well, can drive task success, systems improvement, and individual growth.

Feedback loops

A feedback loop occurs when an input originates from within the system itself, not from outside the system. Feedback loops can be positive, negative, or neutral, and can often be greatly impacted by any one actor who decides to intervene by changing one of the key inputs. This means that you can change the course of a relationship, with a coworker or client, using the right strategic interventions. It’s also why first impressions matter so much, as that impression is easily reinforced.

Regression to the mean

In a normally distributed system, while you might observe deviations from the average, performance will tend to return to the average with an increasing number of observations. This is most visible day-to-day with unconscious habits. Say you want to break your habit of checking e-mail too often. You may make a short-term effort to look at e-mail less, but unless you learn a whole new habit (say, by having e-mail blackout periods or switching to Slack), you may find yourself drifting back to sub-optimal behavior patterns.

Tendency to want to do something

Most humans have the tendency to need to act, even when no action is needed or additive. Action can give the illusion of productivity and progress, perhaps shielding our ego from the fear of failure. At the end of the day, though, we are better off focusing on results. Which links to our next mental model…

Velocity

Velocity is how fast something gets somewhere — speed plus direction. An object that moves two steps forward and then two steps backward has moved with speed but with no velocity. Focusing on velocity can be a tricky disposition to manage in light of its competing mental model “Tendency to want to do something.” Thus, if you are uncertain as to whether actions will be additive, it is important to try to take considered actions that produce data that inform whether you are moving in the right direction.

3. People

All the planning and process in the world doesn’t amount to a hill of beans without getting people on board with you. Working well with people is most of the magic of successful initiatives. The following mental models are two considerations to keep in mind when getting in the flow with your team or client.

Influence of stress

Stress causes both mental and physiological responses and typically amplify our biases. Stress can also cause us to be hasty and revert to unhelpful habits. Thus, it is important to be sensitive to people’s stress levels, and to try to either reduce stress or introduce conditions that improve the quality of team engagement during stressful circumstances.

Circles of competence

Circles of competence are niche areas of specialization that people develop. Understanding your circle of competence enables you leverage your strengths, identify opportunities for improvement, and learn from others. Many a successful CEO has cited this as a top skill that enabled them to manage a global company. The same is true on a micro level, within a small team.

Leveraging mental models

The world can often seem very complicated because, well, it is! But not all of that complexity is relevant. Being able to more quickly filter out the noise and cut to the heart of the matter is a critical skill in an world of increasing information density. The mental models above provide tools to help evaluate plans and processes, and optimize how you work with people.

Shaping community in the age of Facebook: three success stories

 Source: Sagepub.com
Source: Sagepub.com

As American society is increasingly moving from towns to cities, and from meeting face-to-face to meeting on Facetime, we have had to re-imagine community. We are figuring out how to navigate the “iPhone Effect” on our social connections. And our choices about how we engage with others with technology have huge implications. Will our social capital die down as we withdraw from traditional community, as Robert Putnam feared, or will community simply take on a new form? What does it look like to create and maintain a network of reliable peers, to make meaningful connections in new ways that suit our modern context?

Three principles from three places

I have been a part of a few different communities – work, home, and church – and have observed a few features that have made each a place of belonging. I’ll share a story about each, and then explore why these features of community feel increasingly rare.

De-anonymize

It’s wonderful to be loved, but it’s profound to be understood.

— Ellen Degeneres

In hustle-bustle cities like New York, there’s a sense of anonymity as you walk the streets and peruse the shops. You may be having a bad hair day, but you’ll never see those people giving you side-eye again! It can be liberating. And isolating. And so when I walked into Abyssinian Baptist Church, I noticed the immediate difference in the environment. Famous for their role in the Civil Rights Movement, ABC‘s activist roots run deep and were laced through the sermon. But that is not what gave the church a palpable feeling of connection. Rather, it was their ability to lift their community members up and make them known to each other. The head pastor invested a quarter of the service in spotlighting congregation members, asking them to stand and share their two way relationship with the church. The children reading passages from the bible were introduced. A woman who leads a black women on Broadway group was announced and lauded for her contributions. With so many names and faces getting celebrated and supported, it de-anonymized everyone, made me proud of people I didn’t actually know. In other words, I didn’t just connect with the general experience of the church service. I felt I understood some of the people in it, and cared about their well-being.

But this sort of success in fostering connection doesn’t happen on its own. It needs to be deliberately structured into the cadence of community interactions. The next principle and example share a great success story of building relationships in a group whose members were simultaneously complete strangers and close peers.

Build a support system

Architecture starts when you carefully put two bricks together. There it begins.

— Ludwig Mies van der Rohe

Gathering a bunch of people who don’t know each other well in a room, even if they have a lot in common, can often lead to short, somewhat transactional exchanges. Yet that same room of people, with deliberate facilitation, can come alive together and seed the beginnings of lifelong friendships. I saw this arc in my company as we facilitated educator user groups, brought together virtually to develop free math resources online. At the end of the first user group, educators noted that, even with virtual summits and chat room discussions, they felt they’d missed an opportunity to connect more meaningfully with their peers. And so we designed more structured interactions into the next group’s architecture. We created peer pairings for ongoing support. We gave each educator two peer reviewers to provide feedback on the resources they designed. And we scheduled weekly discussion prompts for the chat rooms, giving educators a predictable rhythm of convening to exchange information and ideas. Engagement skyrocketed, and lasting friendships developed.

Providing structure to interactions led to shared expectations about engagement. This organically led educators to invest time into knowledge sharing above and beyond what the program required. Creating availability, it seemed, had been the key ingredient to relationship building. This has proven out in other communities, as I explore in the next example.

Be available

The more we can be in a relationship with those who might seem strange to us, the more we can feel like we’re neighbors and all members of the human family.

— Mr. Rogers

In many buildings I have lived in in New York, I never met my neighbors. My latest apartment is different. There are a number of retired folks who have lived in the building for many years, and they use their free time to be, well, neighborly. They have time to chat in the hallways. They knock on my door if they notice I have a package in the lobby. They offer to dog-sit. In short, they have time for me. And I, of course, have time for them. I offer to plant sit and pick up their mail when they travel. I have their phone numbers and know who their friends are in the building. We’ve inserted a bit of dependability into our network, by taking every small opportunity to be supportive of each other.

Where technology fits in

You may be wondering, why isn’t all of this obvious? Why is it so rare to know and support the people in your social circles in a reliable way? Why do we fail to consistently invest in relationship building?

Many would argue that today’s lower levels of community connection are a continuation of a multi-decade trend. Robert Putnam famously published a macro analysis in Bowling Alone: The Collapse and Revival of American Community, that identified a 58% decline in club meeting attendance, a 43% decline in family dinners, and 35% drop in having friends over between 1975 and 2000. Putnam identified changes in work, family structure, suburban life, and screen time, among other factors, as contributing to this decline in meaningful group relationships.

The solution to help buck this structural trend, according to the tech giants of the 2000s, was technology. Technology was supposed to bring us closer together. Facebook famously claimed that it could expanding the Dunbar number, the number of meaningful relationships a human can maintain. However, it turned out that the Dunbar number didn’t change. What social media has done is bring your outer circle of acquaintances in, rather than strengthening or growing your inner circle. Simultaneously, technology has increased our culture of distraction, competing for attention that could otherwise be focused on our close friends and communities.

If we rule our technology, and don’t let our technology rule us, it can still be a tool that builds community rather than undermines it. Use technology to make yourself available. Use the structure of a WhatsApp group to organize regular meetings. Carve out time in your group gatherings on and offline to hear more about the individuals that make your members. Abandon the convenience of liking a post, and actually speak directly to your friends, be it in-person or on Skype. Reject the loneliness of optionality and anonymity that big cities and infinite online interactions offer. Make your circles smaller and your world more personal.

Why Brazilians are burning the Amazon, and how policy has solved this problem before

 Satellite image 2019 Maxar Technologies
Satellite image of Amazon fires from Maxar Technologies, 2019

Nations across the world are lambasting Brazil for the rising rate of deforestation by forest fires. Images of the blazing infernos across the Amazon are viral on every media outlet. Surprisingly, most coverage frames the issue as a political one rather than an economic one. The focus remains on Bolsonaro’s right-wing politics, and the social injustice to indigenous communities being driven from their lands. Yet few ask why burning the rainforest seems to be the best economic option for so many farmers and ranchers. A candid look at Brazil’s economy and the nature of this classic policy problem point to both the central issue and some possible solutions.

One of the most unequal economies in the world

The Gini coefficient is the World Bank’s choice indicator of social progress. It measures income distribution, where 0 represents perfect equality (i.e., everyone has the same income), and 1 represents perfect inequality (where one person has all the income, and everyone else has no income). In May of this year, Brazil’s Gini coefficient rose to 0.627, just shy of its 1989 record of 0.633, when Brazil was the 2nd most unequal nation in the world. This marks a huge regression from their decade below 0.55, and it’s 2018 level of 0.51. In other words, more people are worse off this year than last.

 Brazil’s Gini coefficient, a measure of inequality, was declining over the past decade
Brazil’s Gini coefficient, a measure of inequality, was declining over the past decade

International pressure doesn’t put food on the table

The international community is doing its best to apply economic pressure rather than ease economic suffering as their chosen solution. And it doesn’t seem to be working. France threatened to scupper the EU – Brazil trade deal over the Amazon fires. Yet with the US – China trade war heating up, Brazil has another big market to sell its soybeans and cattle to.

So the EU tried offering a carrot with its stick: $20 million in aid to help fight the fires. To put that in context, the world’s richest nations just offered 1/6 of what Juicero raised to help combat the Amazon wildfires. It’s a literal drop in the bucket.

But none of this is surprising, because the benefits of burning the Amazon are concentrated and the cost are dispersed.

Concentrated benefits + dispersed costs = tragedy of the commons

Economic benefits and costs can be both concentrated to certain individuals and small groups, or dispersed to the public. Different archetypal social behaviors emerge with each combination of costs and benefits. The most challenging dynamic is the tragedy of the commons. The tragedy of the commons occurs when individual actors overuse a public resource. It’s what causes over-fishing or drinking water pollution by factories. All the benefits flow to the individual or company. But the costs are so dispersed that no individual baring just a fraction of the cost has enough incentive to take counter action. Hence the richest countries in the world offering Brazil only $20 million to fight Amazon wildfires. That’s their willingness to pay as individual countries for the global benefit of mitigating climate change.

 The tragedy of the commons occurs when individual actors overuse a public resource
The tragedy of the commons occurs when individual actors overuse a public resource

How tragedy of the commons is (usually) solved

To overcome the tragedy of the commons, most policy makers try to emulate a market place. Governments try to create concentrated costs to match the concentrated benefits. They typically do this via privatization or regulation.

1. Privatize

Privatizing public resources is thought to create a sense of ownership that incentivizes long-term maintenance of those resources. This has worked for U.S. forests: privatization has led to sustained growth for about 50 years. Because loggers never want to run out of trees on their allotted land, more than 90% of U.S. paper comes from high-yield, rejuvenated forests planted for harvest. Fisheries have also tried privatization in the last two decades, with notable successes. The Mid-Atlantic Fishery Management Council privatized harvests of two species. This led to sustaining yields while cutting the number of boats needed by 90%.

Yet few critics trust privatization writ large. Standard market dynamics often continue to motivate destruction of the commons.

“Privatizing the commons may not work in a lot of cases. The incentive to chase a quick buck may outweigh the financial and social rewards of long-term stewardship. Ownership is not necessarily stewardship.”
– David Brodwin, cofounder of American Sustainable Business Council

The Global Landscapes Forum further sites how public land ownership optimizes environmental benefits. For example, many national parks would not exist without federal ownership.

So let’s suppose that privatization is off the table. That leaves us with regulation as a second option.

2. Regulate

Governments protect the commons by restricting resource extraction, using quotas, permitting systems, and bans. Brazil historically implemented restrictions on rainforest abuse, but enforcement has declined. Further, Bolsonaro signaled through his campaign and his environment minister selection that it is open season in the Amazon. The downward trend in government spending further suggests that environmental regulation enforcement will continue to decline.

Money talks

The likelihood of the current Brazilian administration using policy tools to solve this tragedy of the commons is low. But it’s worth remembering why the Amazon is being burned in the first place – money. Perhaps the west’s $20 million pittance needs a few more zeros behind it, and needs to be directed at those actually starting the forest fires. Money is a blunt instrument, but it seems to work for organizations like Kiva, a microfinance match-maker that has distributed $1 billion in loans to 2.5 million recipients. They create an average of 1.2 jobs per loan. GiveDirectly is another example of cash donations changing lives. Sustainable livelihoods and sustainable environmental treatment do not have to be mutually exclusive. We need to be more targeted in our interventions, by directing funds to those who need it most.