Why aren’t all economists rich? Some are. Economics is the most common degree amongst the world’s top 100 billionaires. Some famous economists such as David Ricardo and John Maynard Keynes were very wealthy indeed. However, for the most part, economists will give you a list of excuses why understanding economics won’t make you rich.
They are wrong.
How do I know this? I used my understanding of economics to become wealthy.
I won’t go into the (lame) excuses economists give. Instead, I will tell you how I used my understanding of economics to build my fortune.
Some of these topics could fill a book, so I’ll just cover the basics. I’ve already written articles about most of these topics.
The returns from re-investing profits from an investment are the single most important principle of personal finance.
This taught me a few things: (1) maximize my savings rate (2) invest while I’m young (3) time in the market is more important than timing the market.
Efficient market hypothesis:
The efficient market hypothesis (introduced by F.A. Hayek in 1945) is the idea that prices incorporate all public information about markets. This means that “buy low, sell high” is impossible using only public information.
This taught me:
(1) Technical analysis/day trading is stupid
(2) Don’t pick stocks (unless you can dedicate your career to it). Invest in broad-based index funds
(3) Keep costs low. You can’t consistently generate superior returns, but you can maximize the return from the market by buying cheap ETF’s.
(4) Maximize time in the market because you can’t time the market.
(5) Consistent alpha generation requires non-public information
(6) Don’t trust your money to an “expert.” They are unlikely to do any better than random.
Austrian business cycle theory (ABCT):
The Austrian business cycle theory (Ludwig von Mises, Theory of Money and Credit, 1912) explains how expansionary monetary policy leads to unsustainable investments (the boom), followed by a necessary correction (the bust). This has huge policy implications, but it’s also important for investors.
It taught me:
(1) Bull markets are headed for a correction when investments become unsustainable.
Signs of an upcoming correction may be:
high P/E ratios,
dumb projects getting funded, etc.
(2) Credit expansion (and associated inflationary policies) cannot be reversed. Don’t bet on fixed-return investments.
(3) All fiat regimes end lead to hyperinflation — so protect your assets from inflation. Stocks, precious metals, and Bitcoin provide protection from hyperinflation.
Modern portfolio theory (MPT):
MPT ( Harry Markowitz, “Portfolio Selection”, 1952) is a model to understand the relationship between investment risk and performance. Given a set of investment categories with a given risk and rate of return, you can graph all possible allocations of a set of investments on an efficient frontier: a hyperbola that represents a combination of investments that has the least risk for a given level of return.
It taught me:
(1) While you need to take more risks to get superior returns, you can get a free lunch if your risky investments are uncorrelated. Diversify your portfolio with non-correlated assets to maximize returns given a certain level of risk
(2) Lower your risk with a small allocation into safer assets with minimal impact on returns.
The capitalist-entrepreneur organizes capital and labor in new ways to make a profit. More generally, entrepreneurship is the activity of creatively organizing these elements to create value. (Ludwig von Mises, Human Action, 1949)
The reward for entrepreneurship is the profit the entrepreneur collects from the value he generates.
Everyone faces the decision to become a wage worker (employee) or entrepreneur. The upper end of the wages an employee collects is the value he creates for the business. The lower end is whatever another potential employee will offer for the same service — in other words, “what the market will bear.”
What this taught me:
No matter how much value I create for the business, my salary will always be limited to the market rates.
There are two ways to raise one’s income:
1: Redefine your job so that the pool of competitors is more exclusive.
2: Become an entrepreneur, so that your income is limited only by the value you create, not the prevailing wage.
In practice, I have done both in my life.
As an employee:
For example, I started my career as a software engineer. I then became a software architect, technology lead, director of marketing, then Chief Technology Architect. My strategy was guided by two questions:
1: how can I create more profit for the business and thus increase my value and
2: how can I limit the pool of competitors by working in a more exclusive role?
As an entrepreneur:
In contrast to employees, entrepreneurs can collect all the additional value they create (after expenses). Aside from a few exceptional careers (CEO, movie star, athlete, etc), entrepreneurship is the primary way to real wealth.
Ever since I discovered the role of entrepreneurship from the Austrian School of Economics, I’ve strived to engage in entrepreneurship even while I pursued my career. Currently, I do this as Managing Partner of Vellum Capital, a hedge fund specializing in cryptocurrencies.
Last word on Abundance:
Economics is all about the study of scarcity. Human beings have unlimited needs in a world with limited resources. The field of economics studies how to best allocate these limited resources to maximize human satisfaction.
But this focus on scarcity can lead us to miss another important lesson of economics. Value does not exist in nature but human beings. Human beings create value for themselves and others when they re-arrange capital and labor to produce goods and services.
While the elements of nature are finite, the potential value that humans can create is infinite. For example, some sand on the beach can provide momentary value when kids play with it. It can provide more lasting value when it is used to mix concrete for a building, or even more if the silicon is made into solar panels, or even more if the silicon is made into a million-dollar supercomputer. The combinations of labor and capital are infinite, and so is the value that they can create.
Economics is all about managing scarcity, but it teaches that the economy is not a fixed pie. Economic activity creates value rather than distributing it. The universe is full of opportunity, and we need only to develop an entrepreneurial eye for our small part of it, to learn how to profit from it.
In a command line window, run ./adb devices. This is just to check that adb can see your Wahoo device.
Run ./adb pull /data/media/0/exports ~/Desktop/wahoo_exports with the last part being the folder you want to save to. This will export every single ride to your PC. Your deleted ride(s) will be there. Look by the date.
You can now sync the deleted ride. I airdropped the deleted ride to the ELEMNT app. That was enough for it to sync.
Time travel requires the creation of a closed timelike curve (CTC): a closed loop in which spacetime returns to the starting point.
Let’s assume that a CTC is possible (an open question in physics), and it allows a single signal (yes=signal, no=no message) to be sent to a time machine that’s already operating, after which the connection ends. What can be done with this low bandwidth connection?
Say your goal is to win the lottery. You start your chrono-receiver and buy a lottery ticket. If you win, you send a yes. If you don’t get a signal, you increment the lottery number and try again. Even if your chance of winning is 1 in a billion, you will eventually get to the correct number.
What do you do after winning the lottery? Solve the next problem. Anything that is physically possible for you to becomes trivial given enough attempts. You just need to build an Ideal Solution Database (ISD) to keep track of successes and ensure each attempt is unique. You are using the CTC to perform computation on an infinitely powerful computer. You can’t go back to before the time machine was invented (that’s how a CTC works), but you can optimize your action post-creation to achieve any and all outcomes that are physically possible. (If this is confusing, watch the Rick and Morty episode “Edge of Tomorty: Rick Die Rickpeat”)
Where does the energy for this process come from? Where does the entropy go? From a thermodynamic perspective, time travel is problematic, whether you want one trip to make sure your parents have that first date, or a quintillion trips to become God-Emperor of Earth.
So this is the basic problem with all time travel in fiction. Even if you don’t set out to create the ISD, the temptation of optimizing any action leads toward the creation of an ISD. As each goal is achieved, the next goal is brought forward in time. The only limitation is the time to record each goal in the ISD, and the process can be used to optimize the ISD too. History compresses into a singularity and the flow of time as we know it ends.
While the time loops may be infinite, the ISD calculations and actions still generate entropy, so the ISD civilization has an expiration date. Assuming the civilization remains in a particular area of space (such as a solar system), it will perform all work possible until reaching heat death. From the perspective of an outside observer, the ISD civilization accelerates to a singularity, then vanishes.
If a CTC is impossible, what’s the point of this speculation? All intelligence tries to approximate a CTC+ISD. When you try to throw a basketball into a hoop, you first create a simple model universe in your mind that simulates the trajectory of the ball, then test the hypothesis by shooting the ball. You repeat the process, using simulation and testing to perfect the ISD in your mind. All intelligence works by running simulations, testing them, then creating a solutions database from the results. Unlike a CTC, each iteration has takes time and uses energy. To minimize this cost of simulation, civilizations are likely to trend to ever more efficient computing, bound only by Landauer limit, the theoretical lower bound on energy consumption.
Currently, we recognize a big difference between simulations (whether in our mind, computer software, or a physical system, such as a wind tunnel) and reality. However, a future civilization which exist entirely as software, and may convert the fabric of reality into computational substrate (aka comptutronium) may not recognize such a distinction. If the Landauer limit is somehow overcome, future civilizations will achieve what is effectively a CTC+ISD.
Today, we are still dealing with lifeforms that are constantly trying to convert the entire biomass of the planet to copies of themselves.
Can you guess what that lifeform is? It’s every single living organism, from the smallest bacterium to us humans. Every organism has evolved over billions of years to optimize the conversion of inorganic matter and other living organisms into copies of itself. The introduction of a new, alien species that dramatically outcompetes other lifeforms in every ecosystem on a purely evolutionary basis would be a quite difficult problem.
To take a small flaw as an example: the “White Claw” invaders in the film can take down top predators – and they can also glide. But flight requires light, hollow bones, whereas brute power to take down large animals and throw military vehicles like matchsticks requires massively strong bones and bulky muscles. The laws of physics constrain all life to specific ecosystems because all life faces all sorts of compromises.
#3 On the proper use of intelligence
In The Tomorrow War, the invaders compete with humans by a non-intelligent (or at least low-intelligence), non-tool using species. Whatever consciousness they have, the White Claws presumably do not adapt strategy or technology to the human responses.
This summer, I’ve been trying to get rid of weeds in my backyard. At first, I tried pulling them by hand, but they grow back. Then I tried an edger, but it does not destroy the roots, so they grow back quickly. Then I tried 30% concentrated vinegar, and it works because it’s absorbed by the roots and kills the plant. While the weeds might eventually adapt to vinegar, the point is that I can change technology much faster than the weeds can evolve new defenses.
Humans have been dealing with invasive species for as long as agriculture has existed. Our key weapon in the fight is our technology. We determine which strategy works and then scale it up. We don’t keep using the same failed methods (small arms fire), like the protagonists of The Tomorrow War.
What should we have done to deal with the White Stripes? Well, wasting resources to firebomb them when they already dominate an ecosystem is stupid. Instead, all initial resources should have been spent to identify a viable defense method, then scale it up. Even within the movie, it only took a day to find a toxin — why did they only think of that in the last gasp of the war? If not a toxin, then what about armored vehicles? Here’s another problematic aspect of big dumb animal invader science fiction: living beings are still made of blood and guts. Physics puts upper limits on density and power so that a tank will always be able to take out a biological being — and do it beyond line of sight.
A small, hidden invader is much more difficult to defend against. A virus, bacterium, or even something mosquito-sized is a much scarier threat than a big dumb animal. Mosquitos have been around for over 200 million years, and their victims still haven’t been able to mount an effective defense.
People are shocked when I tell them that prefer living in a one-bedroom, furniture-free apartment with my wife and two kids, even though I can pay cash for a McMansion or two in the ‘burbs. Why do most people need more space?
Consider my closet: When I decide what to wear to work in the morning, every shirt in my closet is a good option. I’ve gotten rid of anything that for whatever reason is not a viable choice. Most people have filled the majority of their closets with clothes that don’t fit, aren’t stylish, too old, etc. My shirts are dividend into dress, casual, and workout shirts, and I can choose any shirt from each section without a second thought.
By only keeping possessions that continue to add value to my life, I eliminate the physical, financial, and mental drag that comes along with keeping useless possessions. I apply this principle to every aspect of my life:
Toys: The toys that many parents choose for their kids reflect a fear of real life. Their toys represent, a safe, “nerfed” plastic version of adult responsibilities. Kids don’t need fake plastic houses, power tools, cooking appliances, cars, or phones because they don’t need to fake adult responsibilities: they can assume them one at a time. Our daughter got her first sharp knife and her kid-sized broom at three and helps out cleaning, preparing her lunch every day, makes her bed, etc. She acquires adult tools and responsibilities as she becomes physically and mentally able. When she becomes an adult, she will have been doing adult responsibilities and using adult tools for decades. Note: I’m not against toys, just toys which are “nerfed” versions of work that kids are capable of, or providing a plethora toys in an effort to isolate kids in a “play universe” which distracts them from assuming real responsibilities. For example: A doll or construction blocks are productive toys, fake plastic eating utensils are generally not.
Professional projects: Is this project a success story I want to tell about my career? Does this contribute to the goals I set for this quarter? My digital data: I fit my life on a single SSD by using visualization and de-duplication tools to see the entire of my digital life and delete what I no longer need.
Relationships: Do you add value to my life now? If not, why am I spending my time on you?
Furniture: We only keep furniture that improves our lives. Some of our furniture, like our floor-seating dining time, is custom-made to fit our needs. We have no chairs or couch in our home because we decided that our health would be better if we let our bodies do the job of holding us up.
Finances: I can tell you how much assets or debt I have in each account, and how all of my investments are distributed. I avoid unnecessary financial commitments, combine/rollover my investments, and use a single app to visualize my entire financial life over my lifetime.
Daily time: I jealously guard the commitment and habits I make each day. I use five tools to visualize my the locations I visit, the software I use, and the websites I visit.
Television: I don’t watch TV (though I spend too much time on YouTube), but if you do, track and re-evaluate whether you can be doing something more valuable or rewarding with the time you spent on specific shows.
Social media use: I use HabitLab and Apple’s ScreenTime to set limits on how much time I spend on social media sites/apps. Old hobbies: most people have a bunch of junk from abandoned hobbies in their closets. Sell it and focus on what you do now. Books: I sold or gave away all my books and put everything on my Kindle when we moved to China. I have never thought “I wished I kept that book.” Unfortunately, I keep getting new free books – what can I do with used books in Atlanta?
Emotions: We carry emotional baggage in the associations between places, people and situations, and the ingrained emotional reactions they have developed habits around. Separate your rational-evaluative self from your reactive-habitual self and consider whether your emotional responses are productive for the situation you are in.
Insecurities: Over a lifetime, we accumulate fears and insecurities about problems we used to face and inadequacies we used to hold about ourselves. Focus on the person you are becoming, not who you were in the past.
And that’s why a small apartment works for us. An extra room (at this time) would only add unwanted and unnecessary costs and obligations: the cost of higher rent, the cost to clean it, and especially the daily mental overhead of keeping the room neat and organized, etc. To keep up with an entire house is an enormous responsibility. To whatever extent is possible to me, I want to limit every aspect of my life to the things that continue to give me value and lead me to become the person I want to be – not things that reflect who I was in the past.
Today, my *web browser* is insisting that I “can help curb opioid abuse.”
Here is my contribution:
Stock photos in the West universally use the presence of a mug in the shot to connote work, just as the presence of soda or alcohol drunks connote fun. The mug presumably contains coffee, a psychoactive compound which may enhance mental performance. What is shocking is that we not only sanction a chemical dependency on caffeine but celebrate not just the coffee, but our very dependency on it.
Americans see no contradiction with celebrating their own drug addiction to coffee and alcohol while jailing millions of their neighbors who happen to use a different plant for entertainment because of a different economic and cultural context. Cannabis, methamphetamines or cocaine may be stronger per coffee per dose — but make no mistake — if coffee were made illegal, the caffeine density of a single dose would increase to those of banned drugs. Keep in mind that cocaine, heroin, and other banned drugs started out as additives to health tonics and soda drinks, while the THC dose in cannabis rapidly increased after the U.S. banned it in 1937.
I have no problem with coffee as such. I drink it most working days specifically for its psychoactive properties and as medication for occasional tension headaches. However, I would be ashamed to be addicted to caffeine and would consider it a moral failure and a threat to my health. Caffeine addiction is a real health threat, though surprisingly little studied given that perhaps hundreds of millions of Americans suffer from it.
There is sufficient evidence to link excessive sugar intake to the pandemic of obesity and cardiovascular disease. – AHA
The growth of sugar in American diets is primarily linked to U.S. agricultural policy and regulatory capture of agencies by the farming and food industry. This (not our prosperity or sedentary lifestyle) is why obesity is strongly linked to income levels, as wealthier Americans are less affected by sugar additives in food influences by agricultural policy.
Metabolic syndrome is the result of a dangerously addictive diet, just as addictive and difficult to break as heroin or methamphetamines. “Hard drugs” do kill people faster, but only addiction-vulnerable members of society tend to become dependent on them, whereas sugar is a low-level high which has nearly completely infiltrated the American food supply. One big secret of the War on Drugs is that vast majority of people are unlikely to ever become addicted to hard drugs (whether prescription or illegal) because addiction is the result of certain genetic, social, and psychological attributes.
The *primary* cause of any drug addiction is not the pleasure of the high or the pain of withdrawal, but the lack of mental and social structure to provide healthy alternatives to addictive behavior. This is equally true of cocaine, meth, alcohol, pornography, coffee, or sugar. Drug addicts of all kinds universally suffer from a lack of a social support network which advocates and enables healthy dopamine-generating activities.
For decades now, we’ve been hearing how file sharing, cheap iTunes singles, online radio, and stream ripping “killed” the music industry. In 2014, Taylor Swift wrote about the future of the industry in a Wall Street Journal article. Her fantastic economic claims have been debunked elsewhere, but one of her basic criticisms was that Internet streaming is challenging the traditional revenue model of the music industry. However, Taylor’s own career demonstrates how the Internet and digital technology have lent themselves to a creative renaissance of the music industry, in part due to her own leadership.
Rather than the death of the music industry, we are seeing a glorious revival of music, and nowhere is that more evident than the top music videos on YouTube, which has become one of the primary ways that young people listen to music. The YouTube “music” channel has almost 100 million subscribers, with over 4 billion views for top videos. Nearly all of the top 100 videos on YouTube are music videos.
Here are five videos which demonstrate how the Internet is enabling a glorious revival of the music industry:
1: Taylor Swift – Shake It Off
Shake it Off seamlessly blends Taylor’s “dorky dancer” style with some of the world’s best dancers, combining hip hop, ballet, modern dance, jazz, breakdancing, and even a cheerleader performance. The video makes dozens of pop culture references while mocking Taylor’s competition and inspiring dozens of articles about her feuds with other celebrities.
2: Fifth Harmony – Work from Home ft. Ty Dolla $ign
With 1.7 billion views, Fifth Harmony’s hit music video Work from Home shows that the girl group still has massive appeal.
Fifth Harmony rose to stardom through effective social media marketing, with billions of YouTube views and over 10 million followers on both Instagram and YouTube.
In “Work from Home” the group mixes R&B hooks with hip-hop and minimalist synth beats to create a sexy, modern neo-feminist take on the relationship dynamic.
The song features “…slinking beats and playfully sexy lyrics about convincing your partner to skip the boardroom for the bedroom.” Numerous double entendres are present in the lyrics and the music portrays “freaky bedroom fun as glorious mostly in the bounds of a relationship.”
While a previous generation of R&B and pop music presented women as sexual objects, this song and video flips the dynamic and presents men in hard hats with bulging muscles as the object of desire. The women in this video “appear to now be in full control of their collective sexuality and [are] wielding it as they choose.”
The audio and video editing on the music video are impeccable. Before digital editing, music videos like his would have been prohibitively expensive to produce for all but the biggest stars. Modern digital video editing tools have allowed little-known groups like Fifth Harmony to rocket to stardom by releasing tracks and videos that are just as polished and thought-out as Hollywood blockbusters.
The music in Work from Home was digitally produced by two artists, while other groups recorded the vocals, and yet another company mixed the vocals and audience, and incorporated samples from other songs. The digital nature of modern music and video production allows the entire process to be distributed across a complex global supply chain.
Similar videos have led to great success for other girl groups: see G.R.L.’s Ugly Heart and Little Mix’s Black Magic.
3: Cher Lloyd – Want U Back
Cher Lloyd’s track Want U Back is one of my favorites for the playful and creative way she uses her voice:
The track is produced by Shellback, a musician and record producer (with four Grammys) who is responsible for several songs on this list. Cher’s vocals span from low note A3 to high note F#5, and Shellback uses Cher’s vocal dexterity to “give the song an almost caricature quality.”
While digital audio processors such as Auto-Tune are often known as cheap gimmicks, modern pitch correction tools are much more subtle and were creatively used to mix LLoyd’s vocals, including a recurring hook from the sound of her ‘frustrated grunts.’
This track shows the remarkable merger of rap and hip-hop with pop music culture, both musically and socially. Here is Logic’s explanation of his song:
So the first hook and verse is from the perspective of someone who is calling the hotline and they want to commit suicide. They want to kill themselves. They want to end their life. When I jumped on a tour bus that started in Los Angeles, California and I ended in New York City and did a fan tour where I went to fans’ houses and shared meals with them, hung out with them, played them my album before it came out. Them along with other people on tour, just fans that I met randomly, they’ve said things like, “Your music has saved my life. You’ve saved my life.” And I was always like, “Aw so nice of you. Thanks.” And I give them a hug and s**t but in my mind, I’m like, “What the f**k?” And they’re really serious. And they tat s**t on their arms and get s**t like lyrics that save their life and in my mind, I was like, “Man I wasn’t even trying to save nobody’s life.” And then it hit me, the power that I have as an artist with a voice. I wasn’t even trying to save your life. Now what can happen if I actually did?
Rap music has evolved from boasting about women, drugs, and money to awareness of greater social issues. Logic’s music video features a young black man who struggles with his sexuality and considers suicide. Following the night of the 2017 MTV Video Music Awards, the NSPL experienced a 50% surge in the number of calls to their hotline.
For a similar video in the electronic music genre, check out Clean Bandit’s Symphony, which merges classical opera and electronic music.
I am no fan of contemporary dance, but Maddie is clearly a highly skilled artist who integrates movements from ballet and gymnastics into a sequence which deftly visualizes the mix of ecstasy, escapism, and – ultimately – the self-loathing and desperation of Sia’s lyrics.
While Chandelier is lyrically and visually simple, it also highlights cultural assimilation at its best. It is an electropop song that features electronica, R&B, and reggae influences. Sia is an Australian whose career took her to London and ultimately Southern California, where she met local choreographer Ryan Heffington on the set of her music videos. Their collaborations have “done more to raise the standards of dance in pop music than nearly any current artist integrating the forms.” Ryan has since choreographed several hit music videos, tv shows, and even the film Baby Driver.
One unique aspect of Sia’s performances is that she chooses not to reveal her face, and even faces away from the audience during live performances. With 5 billion views, the success of her YouTube videos has been essential in taking her career from a music writer for other musicians to a successful performer, despite her unconventional performing style.
While musicians and music industry executives have often criticized the impact that the Internet and technologies are having on music, several tech innovations are in fact enabling a creative renaissance in music. These include:
Apple has published a Paper and Packaging Strategy whitepaper in which it brags about eliminating a few grams of paper and plastic from iPhone product packaging and announces technological innovations in eliminating plastic and replacing it with robust wood-derived packaging. While Apple should be commended for their leadership in this space, Apple’s environmentalist messaging is nevertheless dishonest both in regard to Apple’s overall priorities and many of their specific claims.
Missing the forest for the trees
While Apple brags about eliminating a few grams of paper from its product packaging, it often forces consumers to throw devices in the dumpster prematurely by making them very difficult to repair or upgrade. These computers and phones are made from precious and rare materials that cost much more than cardboard to procure, not only in terms of raw material cost but also the environmental impact of manufacturing and the human labor involved in processing all the components into a finished product. Apple chooses to build its products in a way that makes upgrading them impossible, even though it could easily, and in fact used to be far more accommodating to customers who prefer to upgrade their electronics rather than replace them wholesale.
Let’s take my own Apple product history as an example:
My first Apple purchase was a 2008 Unibody MacBook. Over the next five years, I upgraded the memory from 2GB to 6GB, and replaced the slow spinning hard drive with a solid-state drive. I replaced the battery (3x), the power adapter (3x), the speakers, and the DVD drive. In late 2013, I replaced my aging MacBook with a new Retina MacBook Pro. It has non-upgradable hard drive and memory that is soldered to the mainboard, the battery is firmly glued in place, the display assembly is bonded into a single unit, and proprietary pentalobe screws discourage me from opening it at all. I replaced that computer in 2016, only three years later because I had filled up the hard drive and decided to upgrade to a new computer. My new, maxed-out MacBook Pro with Touch Bar cost just about $3000.
Of course, I don’t really need a new $3000 computer. I could have gotten along just fine with something much cheaper. Nevertheless, that $3000 represents a significant investment in raw materials, energy, human labor, and of course human ingenuity from the brilliant engineers in Cupertino. There is nothing wrong per se with buying the latest and greatest Apple gadget, but if Apple had invested a minimal amount of its research into retaining upgradable storage, I could have kept my previous model for several more years.
Recycling is not the panacea that Apple presents
I am just one case of millions who contribute to e-waste caused by non-upgraded and difficult to repair products. While Apple celebrates recycling, the reality is that 60% of e-waste ends up in landfills, and even when a product is recycled, most of the energy and material resources used to create it cannot be recovered.
The real reasons why Apple products are non-upgradable
Apple has legitimate business reasons to force customers to buy expensive new hardware on a regular basis rather than allow them to keep upgrading and maintaining it. Obviously, buying a new product directly from Apple more frequently results in better profits. There are other good reasons why Apple might want a shorter product cycle:
Newer products provide a better user experience, one which consumers experience during the life of the product, as opposed to the one-time expense of buying.
Non-upgradable, non-maintainable products are cheaper to manufacture and easier to support since Apple does not need to carry replacement parts, train its staff, or worry about old or odd hardware configurations.
In some cases, non-upgradable products can be made smaller, since modular components add bulk — though Apple sometimes makes components non-upgradable even when there does not seem to benefit from miniaturization.
Apple makes more money selling entire devices than parts: parts for upgrades are often made by third parties and repairs are often performed out in cheaper repair shops rather than Apple stores.
What’s worse is that Apple’s claim that 100% if the energy used to power data centers comes from renewable energy simply isn’t true. As Don Carrington writes in Carolina Journal, “California-based Apple promotes its 500,000-square-foot data center in Maiden, N.C., by saying it runs “100 percent” on renewable energy even though the facility continues to get all of its electricity from Duke Energy, a public utility that primarily generates electricity using coal, nuclear power, and natural gas.”
As Alex Epstein explains, Apple pays other energy users who derive a fraction of the energy usage from renewable energy to “credit” their renewable consumption to Apple. For example, a factory which gets 5% of its energy from wind power will “credit” that wind power to Apple, and Apple credits some of their coal-powered data center usage to the factory:
Apple’s flagship data center in Maiden, NC, for example draws from the local Duke Energy grid with 51% nuclear power, 38% coal power, and less than 1% renewable sources in 2014, according to the latest report by Apple.
The average percentage values for the local grid power available to Apple’s data centers as disclosed in the report for 2014 include 34.8% coal, 22.3% natural gas, 18.3% nuclear, and only 10.6% renewables
This kind of twisted accounting is a fraud is only acceptable in environmental impact statements and government budgets.
The policy impact of misleading claims on the environment
Despite the above criticism, I am a loyal Apple customer and plan to keep using their products. I also think that Apple has legitimate reasons for intentionally crippling the upgradability of their products. Furthermore, Apple devices are highly durable and enjoy a rich repair and reuse ecosystem independent of Apple’s support or sanction. Even completely broken Apple laptops and phones can be resold for hundreds of dollars because third parties have created their own repair tools and parts, and small shops in developing countries are happy to fix and resell your broken iPhone.
Apple is welcome to make its products in any way it chooses, but its messaging is dishonest and misleads the public about broader policy issues. Specifically:
Apple, like all other manufacturing industry, currently depends on non-renewable energy such as coal, nuclear, and natural gas. We are much farther from a fully renewable economy than Apple’s messaging seems to suggest.
The majority of the energy usage of electronic goods happens during production, and recycling does not recover any of the energy used to make a product or the majority of its raw materials. Furthermore, recycling is not nearly as comprehensive or efficient as the public believes.
The other day I mentioned on LinkedIn that I was looking for a freelancer web developer. A USA-based agency messaged me to express interest. Their rate — $150/hour. This a common rate for an experienced US-based web developer. The project I need help with has a budget of about $1000 per month, so this rate would give me under six hours of work, once rounding and communications overhead (or project manager) is factored in. I ended up going to UpWork.com and hiring two developers: one from Ukraine for $20/hour, and one from India for $10 per hour. The Indian developer will do close to 100 hours of work for the same cost. So that’s the basic case for sourcing your own freelancers. The details are considerably more complicated: sometimes a $150/hour developer is a better value than a $10/hour one: a good programmer can be far more productive than an average one, and a bad one will just waste your time and money. The trouble is that if you don’t know what you’re doing, you may end up paying high-end prices for shoddy or useless work. Here is how I approach hiring freelancers:
Good people are hard to find
Whether you’re hiring app developers, artists, video editors, or a project manager, there are usually huge differences between the productivity and quality of freelancers. The average quality of the people who will apply or be recommended for your freelance job posts will be quite low. Most highly-skilled engineers are not interested in freelancing or busy with existing projects, while the bad apples bounce from one project to another.
UpWork makes an effort to recommend the most qualified people for the job, but the candidates often engage in deceptive tactics boost their ratings. Freelancers will steal the information from good profiles, lie about their skills and experience, promise to take on projects they don’t have skills for, or hold your work hostage in exchange for good ratings (yes, this has happened to me).
If you add more rigorous qualifications or required experience to your post, they will use them against you: the frauds will promise to be experts, but honest freelancers (people are rarely a perfect fit) will move on. Many will try to circumvent UpWork: they will email and call you, your boss, your coworkers, and anyone else associated with you on your LinkedIn profile.
It’s possible to screen out the worst applicants (see below), but the only way to identify the 1% who are affordable and qualified is to test them.
How I do freelancer screening
A typical job, assuming a decent description will get about 100 applicants. If you get significantly less than that, your job needs a more detailed description of your project.
You can screen out 90% of candidates by filtering for a 90% job success rate, 1000+ hours worked, good reviews, a credible portfolio, and 10+ high test scores. However, this will usually raise the hourly rate.
1 Screening questions:
I typically do minimal profile screening simply because good profiles are easy to fake. Many individual profiles are secretly teams or agencies, and 1000+ hours on UpWork doesn’t mean anything when they put a brand new guy on your job. I also just don’t have time to screen 100+ applications for each job:
My screening process has three parts:
I ask simple questions which require job-specific experience to answer.
For a web designer: What’s your favorite CSS3 feature?
WordPress e-commerce developer: What version of WooCommerce have you worked with? (Candidates who are not paying attention usually give a WordPress version instead.)
Graphic artist: What navigation pattern would you use for this design?
2 Setup process: With developers, I ask them to follow a specific process which includes
(1) checkout out the code,
(2) messaging me on Slack for a test DB,
(3) sending me a screenshot of their configured dev environment
3 Trial task
(4) suggesting a trial task from the issue list.
90% of applicants will not complete this process correctly. Some tell me “I don’t work for free.” I respect this, and instead ask how they would solve a specific task.
For a complex software development job, 100 applicants followed by a 90% rejection rate still leaves 10 candidates. Each of these 10 receives a trial task. I try to simple, self-contained, well-described tasks with a $100–200 budget. Typically, about 5 candidates will complete the task, and 1 or 2 will deliver quality work. Sometimes none will, and I have to find more applicants. Getting through this process can be frustrating: you will be charged for work that isn’t delivered or must be discarded, will terminate nice guys who can’t deliver on time, and probably find that the best candidate(s) are not the favorites you bet on when you started.
Things are easier for non-developer positions. Artists and graphic designers are easier to screen, but tend to be more flaky with their time estimates. Being patient and understanding, yet severe and final with your judgment is essential in this process.
Establish a good onboarding process
Early in my freelancer management experience, I struggled with managing the cost of onboarding. Some agencies charge thousands of dollars to setup a dev environment and learn your systems. Since then, I’ve developed guides for new developers which communicate three things: expectations, system design/architecture, and development process (“definition of done”). This allows qualified engineers to complete setup without my help — and disqualifies those who struggle.
Use collaboration tools to coordinate distributed teams
It’s important to establish a mature development environment before you begin work. The development environment allows you to clearly communicate requirements and task assignments to freelancers, allows you to monitor the progress of code and functionality, and allows you to perform releases to end users in a deliberate manner.
Issue tracking tools for developers and stakeholders: JIRA or Bitbucket issues
Source code control: BitBucket or GitHub
Continuous integration: I use TeamCity or a PHP deploy script
Development environment: I use AWS-hosted servers
Collaboration tools: Slack for chat & Skype for team status calls
Documentation and specifications: Google Docs, JIRA Confluence
Establish working relationships before starting a big project
A good software team is a complex system: it requires a lot of momentum (aka money and time) to start up and keep going. If you’re planning to kick off a big project, it’s essential to get your team lined up first. Even after you complete a screening process and trial tasks, some turnover is to be expected. Various startup challenges will need to be overcome. You need to get momentum going with a small project before you begin one that is essential to your business.
Sometimes your business needs will require a pause in development, so you will have to invent work for your freelancers to keep the team together, lest they drift away, and you have to rebuild a new team all over again.
If this process sounds too risky, stressful, and complex for you, paying $150/hour+ for a reputable US-based developer or professional agency (with a 30% management overhead) is probably a better deal for you. Alternatively, you can skip the headache and hire me to do all of the above 🙂
(Guest post by By Jeffrey A. Tucker, Director of Content for FEE)
Introduction: a bold experiment in reaching mainstream culture
Two years ago, FEE embarked on an experiment born of frustration. FEE’s website was not a product of its own but rather a kind of information board for advertising the institution. It had low performance. Brand recognition of the institution was not increasing.
And yet there was clearly opportunity. When you look at the venues considered to be mainstream distributors of ideas, they all trend toward the progressive and social democratic, i.e., statist. They fill up the smartphone feeds of millennials. They speak to them on all their social media platforms. Their websites enjoy millions of hits a week. They are profoundly affecting culture – not through political activism, policy study, or academic work, but rather through public commentary on the passing scene. They define what is fashionable.
What is preventing the ideas of liberty from entering this space? Truly nothing but talent, cleverness, and dedication. FEE aspired to apply these traits to our work. We pursued dramatic technological, distribution, and content changes designed to enter into the realm of public culture in a way that directly competes with mainstream venues. We deployed a series of objective measurements to assess our progress. We also set out to be adaptive in all these areas so we could continue to achieve this goal as the tools grew and adapted themselves.
The remainder of this post addresses the content aspect of the strategy.
Fixes and Changes
We first set out to perform a number of technical fixes: in-sourcing the website code for full control and fast development, tagging thousands of articles according to topic, cleaning up legacy cruft, adding missing metadata to articles, and so on. It was a huge job.
We set out to stop the traffic leakage we were experiencing (people hitting the site and leaving) with a series of strategies to capture email addresses. We then built up our daily sending list, from 3,000 two years ago to 45,000 today. As time went on, we added browser notifications for new articles, a new web design to enhance site credibility, and infinite scroll on content display.
We then turned to new content itself. As we looked back at FEE material over the decades, we found a contrast with the way it appeared in the 1950s and 1960s. Back then, the material was directed toward a general audience. It did not use in-group language. It didn’t presume that people were already on board with the libertarian vision. But as time marched forward, there was a subtle change. The language became ever more insular and in-group focused, aimed at movement edification rather than culture-wide influence. The editors presumed, probably rightly, that they were speaking to a marginal group about a narrow topic.
It was renewed interesting in growth among new audiences that motivated a move toward achieving a broader reach. Today, the purpose of FEE’s content is to describe and explain current events, history, policy, and social and economic theory in light of the ideas of liberty, as articulated by the liberal tradition and exemplified by FEE’s 70-year history.
The purpose is to expand the network of users and broaden the base of people who are exposed to a liberty perspective. The metric for us is summed up in one word: traffic, which is a fair proxy for audience. Without this essential component, not much else matters. You can have the perfect product, the perfect prose, the best analysis, the most wonderful presentation, the most correct doctrine. But if no one sees it, there is a problem. The element of traffic also intensifies the commitment to quality work. As Peter Drucker said, “What gets measured gets managed.” You have some accountability. You can begin to craft your product in line with consumer preferences, and thereby replicate the essential dynamic and driving force of the market itself. After that, we look at demographics, granulated data about types of content, what they do, and how sticky their traffic is.
For traffic metrics, we depend on Google Analytics for granulated data and Alexa for ordinal ranking of our site relative to others. In two years, we’ve moved from the 130,000th most popular site on the web up to a stable 22,000. Our institutional goal is always up, with the hope that we will eventually stabilize in the range of 1,000. We have no estimate for when or even if this will happen.
Growth depends on content sharing – not just a first-round of readership but a second, third, and fourth. The content has to spread, not hit the wall of in-group consumption. Why do people share? There are many reasons. Sometimes a hard-edged ideological piece can work for what we call in-reach. But too much ideological vernacular can also discourage sharing, simply because what appears on people’s social timelines becomes a reflection of how they want to present themselves to a wide range of people within their friend networks.
Because social media is a main source of news today, FEE set out to present content that didn’t so much preach the doctrine but illustrate it in a mainstream and credible voice, and provide excitement about how liberal ideas can provide a better and more fulfilling understanding of the world around us. This content should not only feed our fans, but reach outside our existing audience.
Inreach vs. Outreach
For moment-by-moment analytics (and the team truly does follow traffic patterns all day and through the evening), we use Parse.ly, a platform specifically developed for editorial use. It logs on an ongoing basis what percentage of users are new or returning, a metric we use to determine whether a piece has in-reach power or out-reach power.
These two examples come from the day I’m writing this post. A piece on Google’s new translation algorithm posts these results from today.
This is successful outreach. For each new user, we try our best to harvest email, obtain approval for browser notifications, and keep people on the site by pushing more material along the same lines, dropping cookies that are capable of machine learning according to a user’s browsing habits.
On the other hand, here is a much more complex piece on libertarian strategy and the role of ideas – a piece we had intentionally decided for in-reach in order to deepen reader’s relationship with the liberal idea. And sure enough, the reader results are very different.
To be sure, every piece we publish starts out with nearly 100% returning visitors. It is not possible to bypass this group but for paid and targeted advertising. Given that people mostly reach our content via social media, it would be expected that the people who see it first are the fan base on FEE (and this fan base has grown by a factor of 10 in two years). We depend on them to share further outside our network and into theirs. But the path the content takes following that initial release depends heavily on the topic and approach we take with the content itself.
FEE, then, faces a dual obligation: reach new people and feed an existing fan base to further inspire them toward a deeper commitment. Each is important. But given the desire to grow our audience, FEE takes seriously the obligation to seek and explain to all willing listeners of goodwill. We adhere to principle but don’t necessarily wear our ideology on our sleeve or throw labels around, any more than The Atlantic explicitly advocates social democratic ideology in its articles. We show more than tell, in a way that reflects confidence. To put it another way, our philosophy is our musical scale but our literary output is our song.
We’ve discerned that the path to success must be discovered day-to-day through trial-and-error by a creative and venturesome team. It’s a matter of balance: energy with dignity, boldness with class, accessibility with substance, always striving for impact, excellence, improvement, and growth, while modeling the spirit of freedom.
Below are rules of the road we’ve established that reflect the mission and spirit of FEE.
Illustrate the social, moral, and practical merit of liberty as a principle of human association, and present this radical idea in a mainstream voice;
Achieve a balance of news, think pieces, long form and short form, inreach and outreach, classics, reprints from partner organizations, history, law, economics, cultural criticism, personal advice, biography, and so on;
Transcend the left-right paradigm, with roots in “mainline” intellectual traditions;
Strive to be engaging and interesting, with a harmony of graphics, title, and content with a premium on good writing and not just on taking the right position;
Contain no profanity and avoid tacky and vulgar expressions and images;
Eschew overly technical jargon or esoteric topics;
Avoid overly inflammatory rhetoric that panders to ideological biases or otherwise deploys capricious anger, ridicule, name-calling, and invective;
Avoid in-group, insular language and buzz phrases that can only be understood by our most learned fans while making new readers feel unwelcome;
Avoid appearing to push vendettas against individuals or groups or to attack the person, as opposed to the person’s ideas;
Avoid anything that smacks of partisan politicking.
Social media provides the most referrals to FEE.org. Among the platforms, Facebook is the referral engine for 60% of traffic. The next highest known source is Twitter with 5%, then follows Reddit, StumbleUpon, HackerNews, LinkedIn, Youtube, and Blogger. Instagram refers no traffic. It might provide some brand recognition value, but the ROI is unknown. The low level of traffic from Twitter is a bit misleading because these are high-level influencers who then post to their own pages and to Facebook itself. So Twitter works more as a spark than a flame.
For Facebook, we use the Instant Articles application, which speeds up viewing on digital devices. We do almost no paid boosting of articles because we’ve found that if an article is going to do well, it does so without boosting, and if it is going to fail, it will fail regardless of boosting. We do pay for targeted impressions of particular content on individuals’ news feeds, based on carefully selected demographics. Using emails drawn from Salesforce data, we are in the position to place content on donor pages and others based on web-viewing habits.
Intriguingly, 30% of our social referrals qualify as dark social, that is via private messages, private groups, private forums, SMS, and so on. This is a powerful source of traffic but it is neither traceable nor influenceable. As for Reddit, we’ve discovered what others have found: there is no viable way to focus on feeding this source, for the platform is extremely averse to perceived gaming. All we can really do is provide a Reddit link at the top of articles and invite readers to use it.
We automate as much of our social as we can. Every new article (we publish eight per weekday and three to five on both Saturday and Sunday) is automatically posted to Facebook and Twitter using the service Zapier. This massively reduces the chance of error. We post every 45 minutes during the day and every two hours following close of business. Other postings are done by hand by a specialist who follows trending topics and posts relevant legacy content. We have not typically reposted material from other places on the web, but have opted for the publishing strategy described below. In addition, we use Facebook to post institutional news and media.
We use two additional publication venues: Medium.com and Flipboard.com. Using both hand and automated tools, we attempt to keep a solid lineup of articles published at those distribution channels. While Flipboard provides direct traffic to FEE.org, Medium does not – that is, articles “live” on Medium. However, it does account for some referrals, and it also increases brand awareness and realizes certain mission goals with very low cost.
Email as a Product
As implausible as it might sound, email remains one of the most valuable digital products, and, hence a solid infrastructure of email contacts is essential. Because we are producing daily content, we put a high premium on the number of people who received daily emails. Two years ago, we sent to 300 but today send to 45,000, in part by defaulting our email signups to become a daily subscription. We’ve used third-party popups via AddThis but our signups increased 5-10 times by creating our own internal version. Of course popups tend to annoy people and, for this reason, nonprofits might try to avoid them. This is a mistake, in our view, for one reason: they work. We need this infrastructure for our operations.
Of course this also places an extra burden on FEE to turn its daily email into a valuable commodity, something not just for promotion but that also provides delight on its own. Subject lines are chosen carefully to be engaging, and they are different each day. Each send – and we send every day at the noon hour – includes a charming and witty moving gif that is related to the article. The idea here is to create a sense of drama for each day: what gif will I get to see today? As a result, though our numbers of gone up dramatically, our open rates remain very steady. It is a product that people consume on a daily basis, thus increasing brand awareness and gratitude that translates to donor support.
Republishing and Author Payments
FEE has attempted to foster a culture of content sharing within the movement generally. We first put all our content in the Creative Commons, choosing the license Attribution 4.0, which allows for any kind of republishing on any basis provided the source is credited. We negotiated a number of agreements with partner organizations to re-publish their material. We estimate the ratio of “original” to “republished” to be around 40-60%. In terms of traffic, we can discern no trends to predict the reach of either type. Much depends on title, image, trending topic, and compelling content.
Our RSS feeds are set to retrieve the full article content so it can be republished on any site in full. In addition, there is a separate feed automatically created for every author on the site (more than 2,000).
We ended author payments – a break with a 70-year practice, so far as we can tell – because we saw no relationship between the quality of submission and financial compensation. As a result of ending all author payments, we lost perhaps 3 of our stable of 75 or so contributors of original content. In contrast, we have added cash prizes to incentivize authors as a way of broadcasting that we do value writing talent. What authors do value is speed of response, carefulness of editing, and a quick turnaround time.
Most outside contributors receive a personalized response within an hour of submission during the work day, and accepted articles appear on the site within 24 hours. This speed and responsiveness is the best way that FEE can show its appreciation to those who choose our venue as their preferred outlet. And here is another case for keeping traffic as high as we can: FEE can get the word out.
The Team and the Division of Labor
The content team is made up of five people currently: editor, managing editor, associate editor, and two content interns. The skill set required: high-level literacy, proofing skills, basic html, speed, low-level image manipulation, facility with the content management system (Umbraco, which is an open-source management system designed for Dot Net), creativity with titles, and a willingness to work all hours including nights, weekends, and holidays since digital media has no hours of operation. We try to maintain a content mix of original and republished material on a full range of topics. We consult with each other throughout the day and otherwise, in person and on Slack, which is FEE’s internal communication system.
Our work flow attempts to stay one day ahead of the publication schedule. All progress is logged on Trello, a collaboration board that allows for attachments and conversations as material moves through the production structure.
We use Feedly for aggregating content for possible republication. This permits us to navigate content quickly, so that we are not wasting time with random web browsing. Everything we publish is flexible within minutes of going live. Once the publication lineup is ready for the next day, all staff are encouraged to work on writing original content.
FEE is committed to retaining its existing user base and growing it in every way possible, as quickly as possible. We want to contribute to making the ideas of freedom familiar and credible for the rising generation, thus fulfilling FEE’s historic mission and serving as a beacon of excellence in digital publishing. We are confident that we can achieve this with a continued outward focus on customer needs, adherence to the metrics as a main indicator of success and/or failure, and an unrelenting willingness to adapt to changing conditions in the world’s fast-moving market for information.