sarp centel

Predictably Irrational is a book about human behavior and our decision making process from a behavioral economics perspective. Each chapter describes a force that affects our decision making process, such as social norms, emotions, relativity etc. The author presents a different perspective compared to standard economics, where we assume that all agents are rational.

• We make our decisions by comparing each option with another, and end up choosing the relatively best option. Companies use this fact to manipulate our decision making process by putting decoy options. We also anchor ourselves to initial prices.
• We have an irrational compulsion to keep doors open.
• Free is irresistable, when choosing among two products, we overreact to the free one. You can offer a great product for a very cheap price, but people would still prefer the inferior product that is free.
• Social norms make people do things for free that they wouldn’t do otherwise for a small amount of money. Open-source software is a great example.

• On procrastination: He lets students choose their own deadlines for assignments, and compares results with where the professor sets deadlines
• On ownership: Students at Duke go through a very difficult process to obtain football tickets. Those who win the tickets value them at $2,000 to sell them, whereas losers offer $150 for the same experience
• On social norms: They experiment with giving parents fines for picking up their children late, but it doesn’t work as well as guilt does
• On relativity: Same circle looks larger when it’s surrounded by smaller circles
• On cost of zero cost: People prefer $10 coupon for free rather than taking a $20 coupon for $7

Admitting the problem is the first step to a solution. I’ve been exercising on and off for 6 years and given the amount of time and effort I’ve put into it, I’m very far away from the body I deserve. I’ve come up with several conclusions:

i) You can not improve what you don’t measure
For years, I kept going to our local gym where they provided you with all the equipment, but didn’t really measure your progress or keep an eye on you. I kept exercising, without considering if I was improving or not. I was guilt free, thinking that I’m taking action to improve, but I was missing an important piece: diet. I was eating relentlessly, taking more calories than needed, eating desserts and drinking alcohol.

My new gym measures my weight and body fat every 6 weeks. After the first measurement, my body fat was the same, and I had lost some muscle mass. It was a disaster and I was very disappointed. I realized that going to the gym is only 30-40% of losing weight. Your diet, on the other hand, is what is most important.

ii) Working hard is deceiving
I’ve worked hard, but I haven’t worked smart. Working hard is deceiving, it prevents you from achieving your true potential. Little progress you make due to working hard conceals all the mistakes you are making. Don’t fall into this trap!

iii) Exercising is counter-intuitive
To burn fat, you don’t need to run as fast you can. Instead, you should run slowly for a longer period of time, maintaining a certain heart rate. To build muscle mass, you shouldn’t go to gym everyday. Instead, your muscles grow as you rest, so you should exercise every other day. And if you’d like to have 6-packs, doing thousands of crunches won’t help you much if you have a lot of body fat. Those aren’t done in the gym, it’s all about your diet and body fat percentage.

Now that the Netflix Prize is over, Github has a new competition for those interested in recommendation systems. GitHub wants to recommend its users repositories to watch. They have a data set that tells which user is watching which repository. They have removed one watched repository from 4788 users in this data set, so your job is to guess which repositories were removed. Here are some reasons to check this competition out:

• It’s a tractable problem:  Unlike Netflix prize, GitHub has a small dataset that you can experiment with on your own machine. It’s is 4.5 megabytes, with ~450,000 records (120,867 unique repositories and 56,555 unique users). It’s a good chance to learn about collaborative filtering and machine learning methods.
• It doesn’t last long: This competition might not attract researchers with PhDs with the prize: a bottle of whiskey. Odds are you’ll be competing with other hobbyists for one month, so you can’t spend too much time on it anyways (unlike Netflix Prize that lasted for years).
• You can master a scripting language: GitHub has a strong Ruby community, and since you’ll be prototyping a lot and trying different ideas, scripting languages such as Ruby, Python etc. will be very suitable for this task. Writing code is a good way to learn a new language, so here you go…
• It’s a fun learning experience: After the competition is over, participants will be required to share their source codes. If you get yourself familiar with this competition by participating, you’ll be able to learn a lot by looking at other solutions at the end.

Let the fun begin!

Click is a book by Bill Tancer, founder of Hitwise – a company that tracks online usage. This book is about understanding human behavior and drawing conclusions from aggregate online behavior such as search trends. It has a very interesting start talking about adult sites:

• Throughout the year, Thanksgiving is the day with least visits to adult sites since family members are around.
• On a daily basis, adult sites receive most visitors on Fridays, and least on Sundays. Having least visitors on Sunday is explained by religious beliefs but Friday is pretty counter-intuitive.
• 70% of the visitors are male, female visitors prefer erotic literature, whereas male counterparts prefer pictures and videos.

Another interesting claim is that the competitors of adult sites are social networking sites such as MySpace and Facebook because their traffic trends show strong negative correlation.

Another counter-intuitive conclusion from this book is about prom dresses. Since proms are usually in May or June, one would expect people to look for dresses during May or April. However, search traffic for prom dresses starts peaking in January, showing a change in our behavior over the years.

Other parts of the book talk about our fascination about celebrities, failed resolutions, what people are afraid of etc.

Not all parts of the book are equally interesting, but there are a lot of counter-intuitive findings mentioned that makes us question our intuitions and beliefs. Overall, it’s worth reading if you are interested in learning more about humans via our online actions.

I like reading/learning more than thinking/imagining. But this is a learned habit, and I’d like to change that. So here’s a little thought exercise:

Imagine you are living in a smart home where all your electronic appliances are connected to the Internet. Just like web sites do, your home appliances have APIs that let you programmatically access and control them. Not just yours, but all your neighbors are connected to this home appliance network as well, so you can interact with your neighbor’s devices as well. What kind of mashups would you create?

• You can’t improve what you don’t measure: I’d like to have a real-time panel showing electric consumption of each device in terms of cost per minute, as well as aggregated measures, cost by room etc.
• Event based actions: While moving around the house, lights should go on an off automatically using sensors, no more light switches! I’d build a web based remote control panel that shows you the status of each device (temperature, on/off, time remaining etc.) and let’s you control them. When you exit the house, you should get a warning of devices you’ve forgotten to turn off.
• Smart control: Heating and air conditioning devices should retrieve local weather data from the internet and adjust the temperature accordingly.
• More interactive TV: You can see your friends’ text-based comments on the side while watching your favorite show. Or you can see related articles that help you better understand things referred in the show. I’d request a recording from my TV directly to my computer. Subtitles for shows in foreign languages. Reviews for movies I’d like to purchase…

There are definitely more interesting things to come …

I don’t read a lot of marketing books but somehow I got interested in this one via recommendations on Friendfeed. But wait, this isn’t a marketing book. I would call it a book on strategy with marketing theme. It’s an old book, written in 1993, but it was very surprising to find most of the examples and brands relevant and still in existince. Somehow the world doesn’t change as rapidly as we think.

What makes this book interesting is that it supports each law with a lot of examples from popular brands. Moreover, it’s pleasing to understand the reason behind recent campaigns in the Turkish market. For instance, Pegasus Airlines, a Turkish airline company, used a campaign that advocated their 2nd place in the market and tried to communicate that they are trying harder. This campaign created a lot of sympathy for Pegasus Airlines on my end, which is no surprise because they’re using a lot of laws mentioned in this book: Rule #7: The strategy to use depends on which rung you occupy on the ladder. Apparently, Avis uses a similar strategy, claiming that they were No 2. in rent-a-cars. Rule #15: When you admit a negative, the prospect will give you a positive.

Overall, I highly recommend this book to anyone interested in strategy and marketing.

Reading mostly non-fiction, Malcolm Gladwell is one of my favorite authors. I feel as if he’s a writer of my generation since he published his books in 2000 (The Tipping Point) and 2005 (Blink). Both of them were best-sellers, and very good reads. This time, he’s arguing that “there is something profoundly wrong with the way we make sense of success.” in his new book Outliers. Gladwell makes several arguments that I found interesting:

• Accumulative advantage: “It is those who are successful, in other words, who are most likely to be given the kinds of special opportunities to further success. It’s the best students who get best teaching and most attention.”
• Importance of working hard: “Once a musician has enough ability to get into a top music school, the thing that distinguishes one performer from another is how hard he or he works.”
  “Once someone has reached an IQ of somewhere around 120, having additional IQ points doesn’t seem to translate into any measurable real-world advantage.”
• Satisfactory work: “Those three things – autonomy, complexity, and a connection between effort and reward – are the three qualities that work has to have if it is to be satisfying.”

This post is intended for people who will attend a Startup Weekend event for the first time.

Why attend a Startup Weekend?

• It’s a better networking event compared to daily events. You’ll cooperate together to achieve a common goal, you’ll suffer together, you’ll have fun together. Overall, you’ll spend more time together, and form stronger connections.
• If you have acquaintances that you think highly of, but never worked with before, Startup Weekend is the perfect opportunity. You can think of it as a laid-back 54 hour interview for identifying possible startup partners.
• You’ll meet like-minded people. You’ll have fun. You might even start a company!

So, how do I choose which team to work with?

• Don’t choose an idea, choose a team: Even the brightest idea will not get far if there isn’t a good team behind it. Make a good compromise between an interesting idea and a good team. Make sure you team has enough back-end & front-end developers, as well as graphic designers if you’re building a web application. 
• Think twice before joining a large team: (More than 10-15 people) These teams are like large companies, they are not agile. It’s harder to coordinate, reach consensus and make decisions. You’ll also be working on a very small part of the whole, which might not be as exciting.
• Make sure that others are committed: All participants should share the same vision about the product. If you see people throwing in ideas that will take the product to a different direction, it’s a bad sign. Try to anticipate if people will still want to work on this idea the next day.
• Hold up to your ideals: There will boring ideas with huge business potential. Unless your only goal is to earn money, don’t be fooled by them. Life is too short to work on boring ideas!

I spent this weekend participating in Atlanta Startup Weekend 2. If you’re not familiar with Startup Weekend idea, this is a good introduction.

Friday at 7 PM: Ninety random people with different backgrounds (software development, design, marketing, business etc.) gathered in a room to work on ideas that would lead to start-up companies.

Although some people were there to start businesses, my goal was to meet like-minded people, experience this unconventional event and have fun by working on a cool idea.

In the beginning, everybody pitched their ideas for 1 minute, and participants voted to narrow down ideas to 15. Those who made the cut were given 3 minutes for Q&A, and teams started forming.

A few teams disassembled at the end of the first night. Either members didn’t have the necessary skills to realize the project, or they weren’t committed enough to the idea. Friday was spent on discussing details of the ideas, and how they would be implemented. Teams went back home only to come back early the next morning.

Saturday 9 AM: Teams spent the whole day working on their projects. During lunch, there was a talk on intellectual property. Most of the teams had their websites up on Saturday, some were event partially functioning. Some teams stayed till late, while others went back home around midnight.

Fast forward to Sunday 6 PM: 7 teams were ready to present at the end of the weekend. Each team was given 10 minutes to demo and answer questions. I was impressed by twitpay.me (use twitter to make micro-payments, great design) and jumbis.com (one product per day, you get discounts if you agree to post about your purchase on social networking sites like twitter, facebook etc.)

Other projects from ASW2 were fuutprint (digital cards) closebuy.me (local inventory search), givingti.me (give one hour, receive one hour), seedstagerecords (invest in online musicians) and reepli (pr response tool). While some of the teams are selling their weekend projects on Ebay for $2,000, others agreed to continue working on their projects after this weekend. Overall, it was exciting, it was a fun. 

I’ll blog about lessons learned from this event in the next post. Stay tuned!

Atlanta may not be the heart of technology in the U.S. but there are many opportunities to meet like-minded people that are interested in technology here. For instance, Atlanta Web Entrepreneurs Meeting is one of the largest ones with 1000 members. It’s a monthly meeting, where a subject is chosen each month and a few speakers will present on that subject. The one I attended was on iPhone Development, people who developed iPhone applications shared their experiences and gave statistics regarding sales of their applications to an audience of 50-60 people in the room.

Another one is BarCamp Atlanta, this is a yearly event in “unconference” format. There is no predefined agenda, so participants sign-up on the sheets that are hanged on the wall to talk about a subject they want. This becomes the “schedule” of the event. I attended sessions on Erlang, distributed version control, screen scraping with Ruby, iPhone SDK and witnessed how to make ice-cream in a minute using liquid nitrogen!

Overall, these events are great opportunities to meet people with same interests. Reading about technology companies starting in garages, BarCamp felt as if people were showing the cool stuff they’ve built in their garages. I can understand how Steve Wozniak must have felt when he was showing in Homebrew Computer Club the computer he built.

What I like about these events is that they are supported by ATDC, a technology business incubator part of Georgia Tech. They take place right on campus and it’s very convenient for students to attend!

These are the ones I attended so far, but there are more events on meetup.com if you’re interested: Atlanta PHP User Group, Atlanta Web Design Group, Atlanta Cloud Computing User’s Group, Atlanta Python Programmers, Atlanta Ruby Meetup Group etc.