Mundane Creativity
By Kevin
Who would have expected to fold his plug?
As businesses set out to look for the next big thing, there are plenty of stuff we already have that needs to be improved and would have a huge market out there.
For a full decade, laptop computers have been improved continuously, getting slimmer, with more processing power packed into them and lighter batteries invented to match the shrinking size of these machines - but alas, there was little improvements made to the power adapters. Beyond Apple's 'Magsafe' power adapter innovation and their attempts to shrink the size of the clunky component, the computing and engineering world appeared to have little interest in improving the peripherals of computing that were still unfriendly to users.
Which is why I'd applaud Min-Kyu Choi's three-pin plug design. Folding neatly from a standard 3-pin layout to a little slice no thicker than a MacBook Air was already quite a design feat. Even more amazing was the improved multi-plug system that makes great use of the wonderful folded design. It compacts the typical bulky design into the size of a single typical plug that we use today. This guy is a total genius.
And so is the 'A Liter of Light' project in the Philippines. The video demonstrates how a simple and elegant solution can make a huge difference to the lives of people.
Baring the occasional breakthrough that perhaps take years to be widely adopted and to start revolutionizing the economy, incremental innovations and even seemingly petty ones like latest version of Yosion's Apple Peel that turns your typical iPod Touch into a iPhone 4 are the staples that helps to keep the economy humming.
Selling Stuff Right
By Kevin
Tesco's Homeplus campaign in Korea was absolutely amazing. It truly demonstrates how a study into culture-specific consumer behaviours and psyche is really worthwhile for businesses. Time to hire more psychologists and behavioural economists in your marketing departments.
Failing Right
By Kevin
Fall, Just Get up later
Scott Anthony made a good point about the importance of allowing failure to take place and brought up the case of Singapore. Perhaps it is not so much about Singapore but the asian societies in general that faces this problem - zombie banks in Japan, some inefficient state-owned firms in China and more. There's a matter of 'face' and perhaps the 'label' of being a failure. And at times, it's about belief in their ideas (just like in the case cited by Scott in Singapore) - perhaps it is the ownership of the ideas that helps these talents strive hard and be motivated. Still, we must acknowledge the importance of allowing failure to occur and accept it. I believe it's changing and as the social atmosphere towards failure improves, Singapore would embrace failure as part of the process of achieving success.
Networking
By Kevin
Have you connected?
I spent a week at a bank learning how it is like to work there and also the important skills that will land you in a job at the bank. We learnt some really helpful stuff and I think it is important that these skills are all really transferrable. We always hear things about the corporate world that sounds pretty incredible, like an elevator speech/pitch that lands you in a great job or a huge deal, or amazingly tough interview questions that people managed to ace. And you wonder if this all really happens in the corporate world. I guess it does, to a certain extent. Having experienced a really thin slice of corporate life, I reckon these things happens but for most employees in these really great firms, they got in through sheer hardwork, perseverance and being very capable with routine tasks and handling small problems. But it is true that more often than not, connections helps you move up and on. And they often come through networking sessions.
I'm just hoping to share some ideas about professional networking for a student hoping to land on some banking/corporate sort of job/career path.
Before
- Know the details of the event including the kind of people who will be attending.
- Set objectives for yourself such as speaking to a certain number of people or getting in touch with a certain number of people.
- Research on the background of people going or the content of conversations you might like to initiate
- Prepare your ‘elevator speech’ and have it at the back of your mind
During
- Conversation materials: Ask the person about their background, work experience, reasons for choices of work, details of working environment and people, ask them about what keeps them busy at the moment
- Open the circle to let others come into the group if you see anyone around
- Do not over-dominate, and if the conversation is going nowhere, end it and thank the person for their time before leaving
After
- Follow-up where appropriate; asks for the person’s advice if you’re about to apply to the organization or some closely related area of work.
If possible, try to review your own performance and think of how you can improve yourself. Try practicing by just randomly attending these sessions and striking a conversation with someone.
Compare & Contrast
By Kevin
Two recent articles shows how openness balanced with secrecy is helpful for businesses navigating the real world. Management of information/secrets would be an important area for business success in the future. IKEA's Success tell discusses the features of IKEA's corporate style and secrecy while the Leaky Corporation discusses the difficulty of keeping important information internal within organizations today.
Predictions in Social Science
By Kevin
What might fail to happen...
There's many little ideas I got from LSE100 and my course in general here at the LSE but I haven't got the chance to explore them in-depth. I think one thing about tertiary education is that you are packing so much content within a short span of time there's really a severe lack of time and opportunity to ponder seriously over the issues that are introduced to us even when they are extremely important and significant. By the time exams ends and everything is over we're so anxious to enjoy ourselves we can't be bothered. For those who already think JC is like that, then university is a whole new level up. So I guess if you want to do more intellectual exploration you can either choose to be a PhD student, end up as a lecturer and part of academia or you can consider being an idler.
Still, I find this idea we have been toying with, about social sciences, particularly helpful in understanding the inadequacy of knowledge and our inability to have a complete grasp of the world. In my personal blog, I briefly considered the complexity of social sciences and now I'm going to talk about the implication of this complexity on our ability to make predictions. Unlike the sciences, we don't have laws, we only have models (perhaps with the exception of Goodhart's Law, which implicitly suggests there can be no law in social sciences). And these models would break down under different circumstances. A model that is too robust tells us nothing we don't already know whereas a model that is fits well with a single set of conditions tells us nothing about everything else.
And models allows us to make predictions only to the extent the model continues to do a good job with describing reality. Yet the very knowledge of what's next may result in actions that changes reality and result in the break down of the model. And so to ask, why didn't we foresee the financial crisis is unfair because if we did, it would either have caused sufficient panic that it would have come earlier or that it would have alerted policy-makers enough to prevent it completely. Predictions in social science, in the words of my LSE100 lecturer, are 'inherently unstable'. If you predict there's going to be a run on XYZ bank 2 months down the road, and people believe you, then the bank run will be within the week. If people don't believe you, then there's not going to be any bank run unless new information comes in to affect the behaviours of the people. So you will be wrong anyways.
This is something familiar in Economics. When policy makers try and exploit the Phillips Curve relationship, the curve breaks down because the inflationary expectations of the people changes. And if policy makers ignores the relationship, there's a high chance it comes back again. Then they might be tempted to exploit it only to see it vanish again - and then history repeats itself. And because of all that, policy-making and social sciences are extremely nasty businesses.
Ultimate Network Effect
By Kevin
Old and lousy, but everyone uses it...
Economics lecture on demand brought about a short discussion on network effects. It is about how the consumption or use of particular goods/services has a positive value on the good/service to other users. Goods with strong network effect has to rely on mass adoption by the market to take hold and they tend to persist especially strongly until displaced or rendered obsolete by technological advances. The classic example would be the telephone, where you would only want if people around you had them. As a result, there is a strong path dependency in that competing products succeed or fail almost solely because of their initial ability to amass a large user base.
It has been argued that Windows Operating System enjoyed network effects because software developers started developing softwares for the Windows platform only when many people use it and people use it because most softwares released in the market only runs on Windows. How this started was entirely because of the pricing of Windows in its early days, partly due to piracy and also a bit of luck. Taken to the extreme, the network effects can suggests that people might be using a product or service only because many many other people are using it and not because it is really good. For some time, Windows was considered to be enjoying network effects to this extent: everyone thought it suck but continue using it because the softwares they needed to run only ran on Windows. It takes the rise of the internet and emergence of many mobile devices to reduce the dominance of Windows.
Social Networking sites such as Facebook or MySpace or Friendster also depend on network effect. Obviously, the ease of switching between these platforms (they're free, anyone can sign up for an account) meant that there's still a degree of competition in terms of the quality of the service but essentially there will come a day where it gets really difficult to lure people away from Facebook because they have got so much of their lives in there and all their friends are on it.
Yet the most powerful network effect have been overlooked by most of us. It was that of fiat money, paper currency issued by government backed by nothing. The reason you accept them is because everyone else accept them and we all need a medium of exchange.
Distribution Effects of Queues
By Kevin
Smart Choices
This really is just a piece of random economic musing.
In a shortage, rationing is adopted sometimes and queues result when it is not possible (socially or legally) to raise the price of the goods in question. This means that price is used as a resource allocation mechanism up to a certain point ('zero' if the resource is given out, the price ceiling if it is subjected to a price control) and after that, the rationing distributes goods not based on people's 'ability to pay' but on people's 'ability to wait'.
This could mean that goods wind up in the hands of those who exhibit the lowest productivity in the economy (because the opportunity cost of their time is just too low) though in reality, this is usually not the case (even highly productive people who need the good would have to queue). Isn't it strange that the distribution of goods should end up resulting in severe loss of productivity and therefore forgone output? The question, simply put, is who do you want the goods to end up with. This is not so much an obsession with efficiency as a questioning of the effectiveness of a means of distribution.
Demand & Supply
By Kevin
Raise Prices
KOI Bubble Tea is cheaper in Toa Payoh than in town. Fans of KOI would immediately point out that it is untrue, given that the menus and the pricing of the products in the outlets are the same (or is it already different to reflect the demand differentials?).
As it turns out, when a firm refuses to raise prices at times of huge demands, supply will continue to stay below demand (shortages ensues) and while consumers enjoy the good at same prices, the ones who are more willing to pay the high price would jostle their way through, pit their patience in waiting lines with the less willed customers and even throw out their attitudes to buy their bubble teas. This is the implicit costs of the product when there is a shortage. And even when things are less tough than what I described, the fact that the area surrounding KOI at Illuma has turned into some sort of mini crowded park shows how the implicit costs have manifest itself as waiting time. Those willing to pay more would spend more time waiting (then again it may be influenced by the 'exchange rate' of time).
This brings me back to the point of why KOI bubble tea are more expensive in town: the queues are longer! When you factor in the implicit costs of stuff, you'd understand the reality of demand and supply. Our market has lots of friction despite being largely efficient and transport/transaction costs sometimes messes up price signals (from our perspective). I believe that a good way of solving the 'problem' here is to raise prices of the bubble tea in the town areas (in short run) and then try to raise the capacity of their production so that the supply of KOI bubble tea would increase in town if they would like to keep the current prices.
Price discrimination in different branches may actually be a combination of cost differentials, a genuine effort to price discriminate as well as demand differentials. In fact, other bubble tea shops practice that. Sweet Talk at Teck Whye Crescent is priced lower than the Sweet Talk at Lot 1 or Bukit Panjang Plaza (if I'm not wrong) and MacDonalds long offered value meals at slightly different prices in different branches. It is normal and paying more supposedly reduce your waiting time. If you rather pay it with your time, then feel free as well.
Distance Fares
By Kevin
New Fares!
On 3 July, 'Distance Fares' were implemented for the buses and rail public transport system in Singapore. I got to try it out first thing in the morning that day (which is basically yesterday) while taking public transport to Tiong Bahru Market.
The journey consists of 2 legs - one bus to a particular bus stop and then I have to walk a short distance to another bus stop on another road for another bus to my destination. Before the distance fare, I had to pay $0.69 for the first bus ride; then $0.19 for the second bus ride (after the rebate of $0.50 from the base fare of $0.69). That cost me $0.88 for the entire journey.
For the 'Distance Fares' system, I had to pay $0.71 for the first bus ride, which was actually 2 cents more than what I had to pay in the past; but on the second bus ride, the fares turned out to be $0.00. In other words, it was still within the 3.2km base distance and therefore I didn't have to pay a single cent more. As a result, the journey cost me only $0.71. I'm not advertising for the new fare system, just pointing out a particular feature of it.
The new system raises the base fares (from $0.69 to $0.71) and thus would cost people much more for short rides that consist only of a single bus. Compared to the past, commuters of this sort of rides would have to pay 2 cents more than the past. For those who need to change buses over short journeys, the new system would cost a little less. These commuters would save approximately 17 to 19 cents. The more buses you originally had to transfer within your journey, the more you would save. Over extremely long distances on a single ride, commuters would pay about the same level; possibly less because of the per kilometre charge that allow you to pay a more 'exact' fare.
Adult Bus Fares MC curve
I've worked out the marginal cost every additional kilometre as you ride on the bus. When you've already 'clocked' 26.2 km, every additional kilometre only cost you 1 cent. The good thing is that you have about 45 minutes lag time between transfers, which gives you ample time to do quite some shopping or eating before moving off to the next stop. That said, you would actually take a bus to CK Tang, walk around for 30 minutes before going back to the bus stop to take a bus to Heeren and then walk around before moving off again. You'd be paying less than if you had done the same in the past, though it makes little sense to do that.
If you're like me in the sense that you are always on the go and need to have meals between destinations, the distance fare is a good thing. I could take a bus, stop by somewhere to have a meal (within 45 minutes that is), and then hop on another bus bound for my destination. That saves me approximately the 17-19 cents that I was talking about earlier. The question really is whether the transport companies are earning more from this whole system. I would say not; the thing is that majority of commuters can't possibly have been taking buses only over short distances.
Majority of the trips taken would be within the 6.2km, where the marginal cost of each additional kilometre is 10 cents, and the profit for the company would be the highest. The difference could be that commuters would be encouraged to make transfer that they otherwise won't, allowing the transport companies to make an additional 1-6 cents or so for these sort of transfers while also utilizing their idle capacity. The company essentially manage to apply a more powerful price discrimination that forces customers to pay for the distance they travel on the bus. This is possible because of the market dominance of the firms though I really wonder how SMRT and SBS Transit would share their revenues later.
Further investigations on the effect of the new 'Distance Fares' system is conducted over my personal blog.