The Alexandrian–nay, Gaussian–Solution

Carl Friedrich Gauss

A year ago, I wrote about “the Alexandrian solution” to the Gordian Knot. I saw this as a metaphor for all instances in which genius lies in espying the simplicity hiding in a complex situation.

It just occurred to me that Carl Friedrich Gauss was, at the age of 10, just such an Alexander the Great. (Alexander was young, too, of course. In espying simplicity, it seems to help to be young — ie, intellectually daring, unspoiled by the complexity of life, et cetera.)

In about 1787, the young Carl Friedrich sat in class when the teacher told the kids to find the sum of the numbers 1 through 100. In other words:

1 + 2 + 3 … + 100 = ?

Think of this as the Gordian Knot. The teacher assumed that the kids would be busy for a long time, practicing their addition skills. Gauss reacted just as Alexander would have (I take poetic license):

This is too f***ing boring. There must be a simpler way.

Did Gauss get nervous as the other kids pulled ahead adding numbers, while he was still at 1, searching for simplicity? I don’t know. But he found it:

He realized that the numbers came in pairs:

1 + 100 = 101
2 + 99 = 101
3 + 98 = 101

(and so on until:)

50 + 51 = 101

So the sum of the numbers is simply (simply!)

50 x 101, or 5,050

You might, if you’re a regular on The Hannibal Blog, be guessing that I’m much less interested in sums of numbers than in, shall we say, Gordian Knots and Alexandrian Solutions in general — meaning in other, preferably surprising, walks of life.

If you can think of any instances in which daring simplicity blasted through mind-numbing complexity, drop me a line.

Steve Jobs as seen through his nemesis

(Credit: Matt Yohe)

As some of you know, I am fascinated by the complex character of Steve Jobs, who is one of the people featured in my forthcoming book (though not at all in his usual context).

So I enjoyed reading this interview with John Sculley, Jobs’ erstwhile nemesis (when Sculley pushed Jobs out of Apple in the 80s).

1)

The interview may be too geeky for some of you, but I like it, first, because of the noble tone in which Sculley speaks. He is not bitter; he does no underhand sniping; he does not furtively try to redeem himself or get even. Sculley simply moves on from what was an extremely painful episode in the two men’s lives to evaluate — and bow to — the genius of his enemy.

(Steve Jobs, from everything I hear, has never got himself to take that same step.)

Sculley speaks, in other words, as Hannibal would speak about Scipio, or Scipio about Hannibal. Great men and women are ennobled by their enemies. Kudos.

2)

Second, I like the interview for this glimpse into the nature of Jobs’ genius. Sculley:

What makes Steve’s methodology different from everyone else’s is that he always believed the most important decisions you make are not the things you do – but the things that you decide not to do. He’s a minimalist… He is constantly reducing things to their simplest level. It’s not simplistic. It’s simplified. Steve is a systems designer. He simplifies complexity.

Simplicity is, of course, a big thread here on The Hannibal Blog. It is interesting that Jobs also admires Einstein, as I do (he is another main character in my book), probably because Einstein had that same yearning for elegance and simplicity. As Sculley recalls:

I remember going into Steve’s house and he had almost no furniture in it. He just had a picture of Einstein, whom he admired greatly, and he had a Tiffany lamp and a chair and a bed. He just didn’t believe in having lots of things around but he was incredibly careful in what he selected.

(Compare this to Feng Shui.)

3)

Third, I like it for what I interpret as Steve Jobs’ instinctive nod to the Dunbar hypothesis.

Named after the anthropologist who came up with it, the thesis says that primates can form effective social groups only to the extent that their neocortex can compute the interactions among the group. The cognitive limit for human groups seems to be about 150. (I once worked with Facebook to find out whether technology might change that. Not hugely, it appears.)

Anyway, listen to Sculley:

Steve had a rule that there could never be more than one hundred people on the Mac team. So if you wanted to add someone you had to take someone out. And the thinking was a typical Steve Jobs observation: “I can’t remember more than a hundred first names so I only want to be around people that I know personally. So if it gets bigger than a hundred people, it will force us to go to a different organization structure where I can’t work that way.”

Man v nature: Simplicity misunderstood

Here’s an important nuance in our evolving debate about complexity/simplicity: We have to distinguish between organic or natural complexity and manmade complexity.

Manmade complexity is usually bad. There is nothing good to be said about a convoluted and incomprehensible system of health-care administration, tax collection, customer support, software navigation, and so forth.

By contrast, organic complexity seems to be not only inevitable but good.

Here is how natural complexity seems to work: As Lao Tzu said in the Tao Te Ching 2,500 years ago:

The Tao gives birth to One.

One gives birth to Two.

Two gives birth to Three.

Three gives birth to all things.

He was describing what we now call the Big Bang: how energy split into two (yin & yang, electron & positron, matter & antimatter), thence into three and then into the whole bewildering world we see around us.

So the physical (Physis = Greek for nature) world is inexorably becoming more complex, as stars cook up new elements and explode to form new solar systems.

Then, as nature becomes biological (natura = Latin for birth), the pace at which it becomes more complex even seems to accelerate.

Evolution means a) that living organisms constantly reproduce with variations, b) that some of those variations will be more adapted to their environment than others and therefore reproduce more, leading c) to new species, which in turn split into yet more species, until d) entire ecosystems come about, constantly in flux and consisting of uncountably many organisms, all feeding off one another.

We could call this complexity but usually we call it diversity. And we consider this diversity good in the sense not only of colorful but also stable.

We do not say, for example, that a given ecosystem has too many “points of failure”, as a computer system might. The opposite is the case: If any link among the ecosystem’s uncountable permutations fails, another connection replaces it. There are redundancies. The ecosystem is self-correcting.

From the point of view of an individual in this ecosystem — an ant, say — the ecosystem might look Hobbesian in that life is probably poor, solitary, nasty, brutish and short. Well, not solitary, perhaps. (But the ecosystem did not evolve for the ant anyway. It didn’t evolve for anything. It evolved because it could not not evolve.)

Man, to the extent that he arrogates to himself a special place in such an ecosystem, tends to cause trouble. Like the ant, he would like to put himself first. Unlike the ant, he can. So he …. simplifies what should remain complex. For example, he goes from ….

…. horticulture to ….

… to agriculture, to ….

… to monoculture:

We’ve had good reason for this progressive simplification: Simplicity, after all, is more efficient.

But there are costs to organic oversimplification: Monocultures, for example, are the opposite of human societies, in that simplicity can lead to collapse.

The Alexandrian Solution

A lot of people have a very famous story … wrong.

The story is that of the Gordian Knot and precisely how Alexander the Great loosened it. Most people imagine Alexander slashing the knot with his sword, as pictured above. But he did not.

In the nuance of how he really untied the knot lies hidden a worldview: the supremacy of simplicity and elegance over brute force and complexity. The true “Alexandrian Solution” was, for example, what Albert Einstein was looking for in his search for a Grand Unified Theory — a formula that was simple enough (!) to explain all of physics.

I’ll give you the background and the nuance of the story in a moment, but first another fist bump to Thomas for reminding us to make the association.

We are, remember, talking about complexity. The Gordian Knot is the archetypal metaphor for mind-numbing, reason-defying complexity; Alexander’s triumph over the knot is the archetypal metaphor for triumphing over complexity. Now read on…

I) Background

a) Phrygia

The Gordian Knot was, as the name implies, a knot in a city called Gordium. It was in Phrygia, an ancient kingdom in Anatolia (today’s Turkey).

The Phrygians lived near (and may have been related to) those other Anatolians of antiquity: the Trojans and the Hittites. They were Indo-European but not quite “Greek”. Their mythical kings were named either Gorgias or Midas (and one of the later Midases is the one who had “the touch” that turned everything into gold). Later, they became part of Lydia, the kingdom of Croesus. And then part of the Persian Empire. And then Alexander showed up.

b) The knot

Legend had it that the very first king, named Gorgias, was a farmer who was minding his own business and riding his ox cart. The Phrygians had no leader at that time and consulted an oracle. The oracle told them that a man riding an ox cart would become their king. Moments later, Gorgias parked his cart in the town square. In the right place at the right time. 😉

So fortuitous was this event and Gorgias’ reign that his son, named Midas, dedicated the ox cart. He did so by tying the cart — presumably by the yoke sticking out from it — to a post.

And he made the knot special. How, we do not know. But Plutarch in his Life of Alexander tells us that it was tied

with cords made of the rind of the cornel-tree … the ends of which were secretly twisted round and folded up within it.

It was a very complicated knot, in other words, and seemed to have no ends by which to untie it.

Lots of people did try to untie it, because the oracle made a second prophesy. As Plutarch said,

Whosoever should untie [the knot], for him was reserved the empire of the world.

II) Alexander, 333 BCE

Alexander, aged 23 and rather ahead of me at that age, arrived in (Persian) Phrygia in 333 BCE. The knot was still there, un-untied.

Alexander had already subdued or co-opted the Greeks, and had already crossed the Hellespont. But he had not yet become divine or conquered Egypt and Persia. All that was to come in the ten remaining years of his short life. And it began with the knot, since he knew the oracle’s prophesy.

Here he his, his sword drawn, approaching the knot:

Did he slash?

No, says Plutarch (ibid,. Vol. II, p. 152, Dryden translation):

Most authors tell the story that Alexander finding himself unable to untie the knot, … cut it asunder with his sword. But … it was easy for him to undo it, by only pulling the pin out of the pole, to which the yoke was tied, and afterwards drawing off the yoke itself from below.

III) Interpretation

I leave it to the engineering wizards among you to re-create the knot as it might have been. But what we seem to have here is a complex pattern that was nonetheless held together by only one thing: the beam.

It was, Einstein might say, like quantum physics and gravity: intimidatingly complex and yet almost certainly reducible to one simple reality.

Alexander, being Great, understood this. He saw through the complexity to the simple elegance of its solution, and pulled the peg.

This is how I understand “the Alexandrian Solution.” I intend to look for it in all of my pursuits. 😉

American Caligulas

Alan Dershowitz

It is fundamental to a free society that its citizens be able to read the law and conform their conduct to it.

So says Alan Dershowitz, a Harvard law professor and famous lawyer, in his foreword to “Three Felonies a Day,” a new book by Harvey Silverglate. (Silverglate talks about his book at the Cato Institute in the clip below).

So this is yet another way in which simplicity, one of my recurring themes on The Hannibal Blog, is a prerequisite for freedom, another thread of mine. By contrast, complexity and vagueness, by entrapping citizens, can lead them into serfdom.

America’s founders, Dershowitz reminds us, used to say that a criminal statute had to be so clear and simple that it could be understood when read by a person “while running.” They believed that, if people struggle to understand what they are supposed to do or refrain from doing, society is no longer free in any meaningful sense of that term.

Caligula

The notorious Roman emperor Caligula also understood this, but had a different motivation. Cassius Dio (LIX, 28.8), tell us that

after enacting severe laws in regard to the taxes, he inscribed them in exceedingly small letters on a tablet which he then hung up in a high place, so that it should be read by as few as possible and that many through ignorance of what was bidden or forbidden should lay themselves liable to the penalties provided…

Another man who understood and used this insight is Lavrenti Beria, Stalin’s head of the KGB, who famously said

Show me the man and I’ll find you the crime.

The Road to American Serfdom

Is America today like Caligula’s Rome or Beria’s Soviet Union? No, at least not yet, and nobody is suggesting that it is.

But the fact that we need to spell this out should itself cause alarm. For this might be the road we’re on. (We already found that the Soviet Union during the Gulag was the only society with a higher incarceration rate than America today. This is not the sort of peer group that one wants to be compared to!)

The reason for worry is the increasing and extreme vagueness of America’s federal and state statutes. Sometimes, in addition to being vague, statutes also contradict other statutes, so that a law-abiding citizen in certain situations has no legal option to act at all! As Dershowitz writes:

The very possibility that citizens who believe they are law-abiding may, in the eyes of federal prosecutors, be committing three federal felonies each day … threatens the very foundation of our democracy…. when the executive branch, through its politically appointed prosecutors, has the power to criminalize ordinary conduct through accordion-like criminal statutes, the system of checks and balances breaks down…. [We are] … in danger of becoming a society in which prosecutors alone become judges, juries and executioners because the threat of high sentences makes it too costly for even innocent people to resist the prosecutorial pressure.

What he is referring to there is the trend among even innocent defendants today to plead guilty to “reduced” charges rather than risk a trial with draconian sentences in the event of conviction. Because that’s what American prosecutors are wont to do: to pile charges upon charges until the victim breaks down in fear, and tells prosecutors whatever they want to hear in return for a deal, so that the prosecutors can then go after another and more valuable target.

Silverglate, in his book, describes case after case of this so-called “laddering” by prosecutors. (Silverglate’s task is difficult because, by definition, the evidence is not so much in trial records but in the plea bargains that did not lead to trials.)

So let’s talk …

About American prosecutors

Unlike Beria or Caligula, they may genuinely believe that they are on the side of good rather than evil. (Technically, the congressmen who write the laws are the equivalents of Caligula; the prosecutors who manipulate the laws’ vagueness are the Berias.) As Dershowitz writes,

The men and women of zeal who use elastic criminal statutes to prosecute citizens who they believe are exploiting or endangering other citizens may in fact be doing God’s work, but they are not doing Jefferson’s work or Hamilton’s work or Madison‘s work or the work of the other founders of our secular nation and Constitution. They should leave to God (or public opinion) the punishment of immoral people who do not violate the explicit terms of criminal statutes.

America, of course, is unusual among liberal democracies in several respects:

Its attorneys general are political appointments by the president. They have two distinct functions. One is to be loyal and trusted advisers to the president. The other, in theory, is to be impartial prosecutors. Other democracies split these two roles into two separate jobs. America does not.
Being a prosecutor in America is very often merely a stepping stone toward higher office, such as senator or congressman or governor, so prosecutors must … win, win, win. (Remember Spitzer?) Never mind the “truth” or “justice”.
At the state and county level, Americans often elect prosecutors and even judges. This is because they believe that democracy is always synonymous with freedom and refuse to examine this idea. In other democracies, prosecutors and judges are civil servants. In America, many of them campaign for re-election, raise money from voters, compete with each other to be “tough on crime” and so on.

As Dershowitz writes,

Our penchant for voting on everything has reached laughable proportions in Florida, where even “public defenders” must run for office. I can only imaging what the campaign must be like.

The result, of course, is a severe and growing threat to liberty. This is a non-partisan issue, neither of “the left” nor of “the right.” Americans (whether on FOX or MSNBC) must stop evoking “freedom” as a soundbite and political cudgel and start thinking about what it actually means and requires.

Watch Silverglate:

The best tax for America

It is Tax Day again in America and some people left their returns to the last minute (as you can see on this photo, which I took in Los Angeles yesterday.) So I’ll take this occasion to muse about the relationship between America’s tax system and freedom.

One year ago today, I offered some “tax day thoughts on complexity in American life.” The gist of that post was that the complexity of America’s tax system, not the rate of taxation, is what harms freedom in this country. Contrary to what you might think if you go to Tea Party rallies, we are not overtaxed, we are badly taxed.

But I did not offer a better — meaning simpler — alternative system. In this post, which I expect to be controversial, I want to do that. (As always, keep in mind that the views expressed on The Hannibal Blog are mine alone, not necessarily those of The Economist.)

There are many proposals out there for a simpler and more efficient tax system: A flat tax, value-added tax, et cetera. I won’t review them all, but instead pick the proposal that I consider simplest, cleanest and boldest.

The Idea

It is the so-called FairTax Plan.

Part of its strength (ie, simplicity) is that I can describe the entirety of America’s proposed tax code in a few short lines:

America’s existing income and other taxes would be abolished. (Not cut, but eliminated!)
The IRS and America’s other organs of proto-authoritarian oppression would also be abolished.
Instead, all Americans would pay a national sales tax, as most Americans already pay state or local sales taxes.
In addition, all Americans would get a prebate — ie, at the beginning of each year, everybody gets a check.

And that’s it!

The drafters of the proposal think that the rate of this new national sales tax needs to be about 23% to provide the same revenues that we now get from the income tax. It might be 28% or 19%. I’m not the least bit interested in that.

The idea is that we raise as much money as we would otherwise raise through an income tax. As it happens, we would need to collect quite a bit less than we currently do, because we would no longer incur the enormous costs of the IRS bureaucracy, auditors and accountants!

Now for the discussion of the advantages and alleged disadvantages of this new tax system:

Advantages

I think the advantages are self-explanatory:

You would keep your whole pay check. Ie, your take-home pay would spike right away.
You would not have to file a tax return.
No more record-keeping! You no longer maintain mountains of paper for wages, the cost basis of your investments, mortgage deductions, childcare and nannies, et cetera et cetera.
IRAs, 401(k)s, Roth IRAs, Keoghs…..: You can throw them all into the trash, because all your investments are by definition untaxed.
Thanks to your annual prebate (which gives you a certain amount of subsequent sales tax “back”), a portion of your consumption is untaxed, too.
But beyond that, all your consumption is taxed, thus making you think twice about frivolous and unnecessary consumption, which reduces your carbon footprint and clutter.
Whenever you do consume (either goods or services), you can see the tax you pay on the receipt, in the clearest and simplest manner possible.
All this amounts to: transparency (replacing opacity) and freedom (replacing anxiety and bureaucracy).

Criticism

There is only one major criticism of this sales tax, but it is a big one, so I want to concentrate on it.

The disadvantage is that this sales tax, like any consumption tax, at first glance appears to be regressive.

In the current system, rich people pay not only absolutely but relatively more of their income than poor people. (There is a reason why I italicized that phrase. Keep reading.) In the new system, poor people (who might need to spend, rather than save, all their income) would seem to pay relatively more of their income than rich people.

And this seems unfair.

Rebuttal

I’ve pondered this for some time. As you may remember, I am a liberal, correctly defined (ie, libertarian but not loony). And I do worry about inequality, which is inevitable in a free society to some extent but in excess (ie, in America) harms freedom.

Part I

My first response to the above criticism is that our current income tax (ie, that which the FairTax proposes to replace) is not fair either!

Warren Buffett has famously explained how he, as a mega-rich investor who does no “tax planning”, pays a lower tax rate than his secretary, who lives off her meager pay check.

Fairness, it turns out, is not about progressive tax brackets. If you have progressive brackets but exceptions to everything (= “complexity”) you get not fair but unpredictable and arbitrary taxation.

So if you do care about fairness, first join me in stipulating that our current system must go.

Part II

My second response is to ask you to re-examine, as Socrates might, what wealth is.

Is it:

to have vast stores of potential spending power (ie, paper statements of bank balances that produce income)?
or to consume vast amounts of resources, human and natural, with your own or others’ (borrowed) wealth?

Our current conventional wisdom says 1. So if income is the definition of wealth, then a consumption tax is regressive.

I propose that the correct definition is 2. So if consumption is the definition of wealth (as it used to be for almost all of human history), then a consumption tax is fair.

Example: Croesus and Diogenes

Let me illustrate that point playfully by reviving two characters who have previously featured on The Hannibal Blog:

Croesus, the ancient king of Lydia who gave us the phrase “rich as Croesus”, and
Diogenes, the Greek cynic who chose to live in a barrel (and who is a hero of mine).

Let us assume that Croesus and Diogenes are equally rich in our Number 1) definition: Both get huge amounts of income from assets (Croesus from tribute, Diogenes from the equivalent of a trust fund set up by his benefactor, a wealthy Athenian).

Now let’s think about how the FairTax would treat these two rich guys:

Both Croesus and Diogenes would start every year by getting their prebate check. Their basic cost of living, their subsistence, is thereby pre-paid.

Diogenes can buy the few things he needs (dog food, loin cloth, etc) and his prebate covers the sales tax on these items. He pays no net tax at all, in other words.

(Meanwhile, he has millions in his bank account, sitting idle for him, but being lent out to other Athenians to grow the economy.)

Croesus is different. He sneers at his prebate check, which barely covers the sales tax on a single slave, and spends it in a day. Then he keeps spending: Gold, silver, jewels, women, palaces, feasts, galleys, ….

He consumes immoderately and to the detriment of his planet. But he is free to do so (freedom is one of our goals), and nobody even looks askance at him. However, each time he spends, he pays tax, and he knows exactly how much (transparency and simplicity are our other goals).

The years go by, and Diogenes donates his potential (= hypothetical) wealth to an anonymous Athenian. His wealth has been helping the economy all these years, because it was being lent to entrepreneurs. But now the Athenian recipient spends the wealth. And as he does so, he pays tax.

The taxes on Diogenes’ money were therefore only delayed, until such time as his wealth turned from potential into actual consumption. The taxes on Croesus’ money were immediate, because he chose to spend.

Every single dollar in the economy is therefore taxed, but only when it becomes consumption.

At a very fundamental level, this is how it ought to be. We should not calculate equality based on income but on consumption. If I have more than you but live more modestly than you, I should not pay more than you. This is the mental switch I ask you to attempt.

I believe it is fair that Croesus pays lots of taxes all along, but that Diogenes, who never consumes much, does not.

Effect on politics

A final thought about what the FairTax would do to our political discourse and climate.

Our current tax system is as complex as it is because it is the tote bag for our politicians: Any weird political give-away — to owners of gold mines or race horese, homeowners or Prius drivers…. — gets dressed up in Congress as a “tax break” and stuffed into the code. Each time that happens, society as a whole loses, but nobody notices because, well, the tote bag is too messy to see any individual item in it.

Complexity, in short, is the tool politicians and lobbies use to hide things from our attention.

If we switch to the FairTax, the tote bag is dumped and replaced by two and only two numbers:

rate of sales tax, and
the amount of the prebate check

Every American could understand this system and therefore participate in our debates about government, funding and fairness.

Should more people be exempt from all taxation? Fine, raise the prebate amount.

Is government too big? Fine, cut the sales-tax rate.

But what what if we still want to help particular groups of people? Earthquake victims or people whose homes are being foreclosed, for example.

Today, we would stuff more gibberish into our tote bag and nobody would notice the cost.

Under the FairTax, we could still help these people, but we would no longer do it through the tax code. We would pay these groups actual cash.

This, of course, would be transparent and easy to measure. Once again, we could all debate whether home owners in foreclosure actually deserve this cash (perhaps not) or whether earthquake victims do (probably).

We would understand what’s going on in our country as well as in our own finances, and understanding is the beginning of freedom.

A shocking thought, isn’t it?

The search for simplicity, continued

Almost six years ago, I tried in The Economist to start a movement for simplicity and against complexity. In this Leader (ie, editorial, to everybody but us), which accompanied this Special Report, I wrote:

“LIFE is really simple,” said Confucius, “but we insist on making it complicated.” The Economist agrees. Unfortunately, Confucius could not have guessed what lay ahead. The rate at which mankind makes life complicated seems ever to accelerate. This is a bad thing. So this newspaper wants be the first to lay down some new rules. Henceforth, genius will be measured not by how fancy, big or powerful somebody makes something, but by how simple.

Alas, that was easier said than done.

But ever since then, I have been obsessed with simplicity, as you may have noticed if you have been reading The Hannibal Blog (for instance here and here).

This means that I palpitate with excitement whenever I encounter other people who share my obsession. Well, Alan Siegel, a brand consultant, appears to share it. Watch (less than 5 minutes!):

Success, then disruption, then failure

You can be too good at something, too successful, so that somebody else, an upstart, undercuts and topples you, turning your success into failure. That’s because of a fundamental asymmetry between your view of the world and your upstart’s. And it makes you vulnerable.

It should be immediately obvious how this notion relates to Kipling’s idea that triumph and disaster can be impostors, which is also the idea that my forthcoming book is based on.

But the idea comes not from the worlds of philosophy or psychology, but from the world of business, which I usually consider unbearably boring and banal. (If it surprises you that a correspondent for The Economist, who has written a lot about business, would say such a thing, well, there it is. I said it.)

That said, we have already discovered that conductors can teach us about leadership and that Rembrandt can teach us about good writing. So why shouldn’t a Harvard Business School professor have something to teach us about life?

The professor is Clay Christensen, and IMHO he is the only business writer who has ever written a book that is not painfully obvious and banal but simple and profound. He doesn’t quite make it into my pantheon of great thinkers, but almost.

Disruption

The term he coined in his most important book, The Innovator’s Dilemma, is disruptive innovation. He explains it in this video.

What Christensen observed in one industry after another is, first, an incumbent. That is the most successful company in the industry, the leader. This company improves, year after year, by adding features to its products and listening to its best customers and meeting their demands. At some point, however, this company’s products get so good that they are more than good enough for most people, and too complex or expensive for the least demanding consumers, or people who don’t even use the product at all yet.

Eventually, Christensen observed, a disruptor comes along. This is a scrappy new company, not worth the attention of the incumbent. It makes products that are clearly “inferior” to the incumbent’s products. They are more basic, simpler, cheaper.

For precisely those reasons, the disruptor will have different customers than the incumbent. The demanding customers stay with the incumbent, whereas people who never used the product at all, or who used it very little, will try out the disruptor’s products.

The incumbent will thus not only shrug at the disruptor but enjoy his presence. That is because the incumbent can now shed the low-value customers and serve only the most demanding customers, charging them more and making more profits. Things seem to be going better than ever.

The disruptor is also enjoying himself. He is not, at first, competing with the incumbent at all, but aiming at people the incumbent never served. He sees the world in a different way. A small new market, with tiny revenues, looks fantastic to the disruptor, whereas it would make the incumbent yawn. This is the asymmetry in worldview.

But something else is going on, unnoticed: All the while, the disruptor, too, is making improvements. And at some point the products of the disrupter become good enough for everybody. This is when the impostor drops his guise.

The high-end customers suddenly start wondering why they have been paying for all those strange features they never use anyway. They defect. The incumbent is toppled and falls. The disruptor takes its place. It becomes a new incumbent, until it, too, is disrupted.

An example

Christensen gives great examples from business history in his book, but let’s take one that, in a different context, The Hannibal Blog mentioned just the other day: cloud computing.

Incumbents: Microsoft (Windows + Word, Excel, Powerpoint); Apple (fancy, snazzy laptops and such)
Disruptor: Google and many smaller companies (WordPress included) that provide free or cheap services over the internet.

For years, Microsoft “improved” Word (to take just that example) by adding features, then made us pay more moolah to install a new version. Microsoft was listening to its most demanding customers–the ones who, say, pretended to need a multi-color, rotating, animated table in their letterhead.

The rest of us hated Word because we just wanted a clean white page that does not disappear every time a laptop breaks. Most of the rest of us (the young and indigent, the poor in Latin America, Asia and Africa) could not afford Word at all, and so we did not use it.

Along comes Cloud Computing. You can now type, save and share simple text documents on the internet, free. This has advantages: several of you, in different places, can work on the same document at the same time. You can access the document from any phone or computer. If your computer breaks, you no longer care.

It also has “disadvantages”: You cannot get that multi-color, rotating, animated table in your letterhead. (More seriously, I could not write my book on Google Docs because it does not support endnotes yet.)

But who cares? Almost nobody, it turns out. So, right now, the poor, the savvy, the un-demanding are the ones using Google Docs most. The suits are still using Word.

Wait a few more years (months?). Then Word as we know it will disappear.

Enough business, back to life!

That is the most I have ever talked about business in my private life, and I feel so yucky that I might have to take a shower. But I was just setting up a different point: Why should Christensen’s insight not apply to … art, science, sports, love and life?

As I write this, I am coming up with examples from all these spheres of life. In due course I will accost you with them. But in the mean time, please feel free to suggest your own in the comments.

New thread: A Theory of “stuff”

I have found myself, to my considerable surprise, doing some deep thinking about stuff. As in: Crap. Things. Knick knack. Papers. All that.

The occasion was a move–the before, during and after. My wife and I have been having to confront the cumulative load of stuff in our house and lives, stuff that has to be stored, then moved in order to be stored again. (Irony, anyone?)

If you are a regular reader and remember my feelings about, say, Diogenes or simplicity, or my utter loathing of clutter and complexity, you can pretty much figure out how I feel about stuff.

My wife does not disagree–and fortunately loves me for my eccentricities–but she is nonetheless

female and
not me.

This places her in a sufficiently different vantage point to produce some fascinating and highly entertaining discussions between us and ideas that I want to share with you in subsequent posts.

So I’m starting a new thread (ie tag) called stuff. Talking about things per se would be boring, so we are talking about things only in order to find out more about life and clutter, Feng Shui and simplicity, fear and serenity, and these sorts of things.

As regular readers know, this does not mean that any other ongoing threads–such as the ones on storytelling, the great thinkers, America, Socrates or, of course, Hannibal–will be interrupted, only that yet another one will be woven into them.

Prepare to get stuffed.

More contemplation of the Bird in Space

You may recall that, a while ago, I showed you Brancusi’s Bird in Space as my overture to a brief meditation on simplicity, beauty, honesty (and Einstein). Well, I couldn’t find a copyright-kosher image of the sculpture I had in mind, so I took a different version, one that was almost as good but not quite.

This, on the left, is the version I had in mind (even though the image is crap). Everything I said stands. When you strip away all extraneous detail, the underlying form of your sculpture (argument, story, living room, body, dish, …) must speak for itself. In this case it reveals its beauty. If the underlying form is ugly, well, let’s at least find out.

How did I come by this picture? Oh, I forget. Let’s just say that an elderly Filipina museum guard made herself known rather instantaneously….

Hannibal and Me: life lessons from history

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Tag Archives: simplicity

The Alexandrian–nay, Gaussian–Solution

Steve Jobs as seen through his nemesis

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Man v nature: Simplicity misunderstood

The Alexandrian Solution