Effectuation Principles – Truth, Objectivity, and Motivation

Effectuation Principles – Truth, Objectivity, and Motivation

Effectuation principles, first introduced by this name in modern literature by Saras Sarasvathy, are powerful decision-making tools to employ when embarking on a quest of creation. Let us examine what we can glean through the lens of each principle
– which theories of truth are assumed?
– how objective can the creator be expected to be?
– from where does motivation spring?

This essay assumes a degree of free will and indeterminism.

The Bird In Hand Principle:

Start with what you have, and build what can be built. Do not attempt to reach an arbitrary goal, rather know that you would create, and look inwards for cues on how to proceed in your creation.

The very idea of synthesising a series of possible creative projects suggests a very variable view of truth. We can rule out correspondence truth theory immediately. It’s less important to find “the true” goal to work towards, and more important to start working towards *any* goal, thereby defining it as your own true goal. Starting with the creation of many possible paths and goals is, apart from rejecting the idea of a golden truth, also distinctly a-platonic in other ways. It suggests a disregard for the idea that we can model the world, and that instead we must create reality, not try to follow an inaccurate map of patently unknown territories.

Objectivity is non-existent in effectuation. Everything stems from the creator, including all of their bias.

So what motivates the creator to act? Considering that there is no tangible project goal in the beginning of the effectuation process, the answer lays beyond the framework. Possibly personal gain in the form of income, freedom, recognition, self-realisation or legacy, and possibly fulfilment of a responsibility towards humanity to move the species onwards and upwards. Since the motivations are extrinsic, the effectuation framework alone will never yield a single answer, and leaves room for many levels of motivation.

(On a separate note, the bird in hand principle is what makes this free business idea worth pursuing mainly for people who are super looped into the publishing business or book club business already!)

The Affordable Loss Principle:

What can *you* afford to lose? What are *you* willing to risk?

Any truth here is your own. Most people won’t be able to find any comfortable measure of willingness to lose.

Your motivations will play a major part in interpreting this principle. Are you in this world to ensure that future generations move on to bigger and better things? Is there any price too great to pay for that? Or are you just looking for some well-deserved recognition? In this case, the price you’re willing to pay would be a lot lower!

The Crazy Quilt Principle & The Lemonade principle:

Build trust, drive involvement. Find people who can be committed to your goals. When life gives you lemons, make lemonade. Not revolutionary concepts to be sure.

The principles don’t lend us much in the way of new information for our original question, either.

The Pilot-in-the-plane principle:

The future is not predictable (Taleb would be proud, screw models). However, some tools to alter the future are within the creator’s control. These tools are, of course, encompassed by the 4 other principles of effectuation. So, there is some correspondence-truth at play, since effectuation principles are defined as your absolute best tools for manipulating the outcomes of your creative venture.

Why you do all of this is still totally up to you. Your motivations are your own, as a creator. And objectivity? As pilot in your own plane, there is none 🙂

Free Business Idea #1 – Niche Book Club / Publishing Gig

Free Business Idea #1 – Niche Book Club / Publishing Gig

The Problem:
All good problems have more than one angle. Let’s examine the problem of niche underground authors from two such angles!

First, imagine this: You’re an author. That is to say, writing is your passion. Never mind the fact that you’re effectively a professional barista, 3 years of experience and counting, that’s far from the point. You are an *author*, and a great one!
You’ve written 5 manuscripts in the last 3 years, 2 stirring novels about love and loss, and 3 philosophical short stories about finding meaning. Sometimes you show your work to the customers. They love it. Your manager doesn’t.
You’ve sent your work to countless publishers. In the beginning you had hope, just like J.K. Rowling, that you’d prove them wrong, all the agents who dismissed you carelessly. You’re starting to lose that hope. But you remain an author. It is who you are.

Next, imagine this: You are an avid reader. You have torn through all the classics in fiction and non-fiction alike, and you eat up the best-seller lists and critics’ recommendations faster than they can be produced.
You are starting to feel a level of same-ness. There is a comfortable homogenous mix of topics and methods that never stray very far from the norm. You want more.
You want rare pieces, new perspectives, amazing thinkers, something that’s not on the main stream. But it is non-existent. Anything that makes it into a bookstore is mainstream, otherwise the publisher would have waved it lazily away as too risky to print.

It is somewhat obvious when you lay it out like this, that if you could supply these hungry readers with the special books they so crave, and at the same time could publish these author/baristas and make dreams come true, you are on to something. So, the solution is elegant.

The Solution:
Publish and print niche books in tiny batches, and send to readers who are hungry for unique and personal content for their collections.

The Why:
Because of your own burning passion for making people’s dreams come true, for expanding people’s horizons, and for exposing the world to more opinions that the mainstream ones that end up on the bestseller lists.

Thoughts on Method:
Concept for authors: Get your work out there and appreciated.
Concept for readers: Get access to new and unique material, sign up for a new book each month, guaranteed small print volume and unknown gem authors.

Make sure to keep total print volume per piece low. Maximally one book per club member, and no 2nd editions in most cases. Keep it special, keep it high end.

Plenty of print shops exist that will print tiny batches of books. Any author could do this on their own. If you build an audience large enough, you will be able to do it a little cheaper, but this is not where you win. You win because you connect people, you provide authors with an outlet, and you provide avantgarde readers with a way to breathe new ideas and perspectives.

The age of mass advertising is dead. You must not find an author, print 500 books, and try to find readers. Instead you must find the hungry readers, and ask them what they want. In that endeavour it’s a powerful asset for you if you’re already in the underground literature arena, so you know who to start talking to. If you’re a stock MBA you’ll have trouble empathising fully with the target market. Although perhaps some authors could help uncover their potential readers to some degree too.

Technically, you have two markets here, and it’s up to you where the primary cashflow should derive. However, if you adopt a free model for authors and premium model for book club members, you are adapting best to where the real money is at.

How We’re Not Killing The Planet

How We’re Not Killing The Planet

Notice how whenever human impact on the environment is brought up, people instantly focus on the negative. Sure, humans have done some detrimental things, but we are trying to make up for it. Teams all around the world are currently brainstorming ways to preserve the planet. We may not have everything figured out, but it’s time to cut the human-race some slack, as we are moving in the right direction.

As a frequent flier, I’ve noticed significant changes in aircrafts. Older planes were super loud, coughed out excessive amounts of pollutants, and used way too much fuel. Nowadays, when I fly long-haul, i’m transported on the dreamy Boeing 787 Dreamliner. Not only does this humongous plane make me feel comfortable and relaxed, it’s also Eco-friendly! This state-of-the-art invention is manufactured with fewer hazardous materials, produces less emissions, and consumes lower amounts of fuel. No longer will you be contradicting yourself as an “environmentalist” when you fly often. Speaking of transportation, we all know that carpooling saves resources and energy, but is usually thought of as an activity carried out through friends. Recent future advancements have resulted in apps allowing people to carpool with strangers. You heard me, carpool with strangers. Though it may seem daunting to hop in a car with someone you’ve never met, programs like Blablacar provide extensive details about the drivers driving experience and recent reviews from other passengers. Avoid emitting unneeded pollutants from your car into the ecosystem and instead join someone who’s headed towards your destination. Not only are you being greener, but you may also make a new friend.

National parks, such as Grand Canyon and Yellowstone, may have a bad-rep for being over-crowded with pesky tourists and high-strung families, but they exist for a good reason: they are beautiful. The idea of allowing the government to protect different natural wonders worldwide is genius! Conservation on this level ensures that generations to come can bask in the beauty of Earth the same way we have. New laws are developed all the time to decrease oil-drilling or guard new-found lands to minimize the human footprint. Along with finding new areas, important information is spread diligently once it is released. Take Cowspiracy, for example. This documentaries popularity has skyrocketed since Leonardo DiCaprio decided to fund it. The information in this film is shocking to many, as it explains how animal agriculture is the leading cause of deforestation. This film is meant to cause cognitive dissonance, in order to make a change for the future. By spreading awareness of the primary reason for trees being destroyed worldwide, the filmmakers hope that the human-race can make a simple switch to their diet in order to save the entire planet from collapsing.

Remember when recycling was seen as something that only crazy, earth-loving hippies did? Fast-forward to today, where recycling bins cover street corners and schools offer separate containers for plastic bottles and paper waste. In fact, certain colleges don’t even sell plastic water bottles on campus to prevent unnecessary non-biodegradable substances from polluting the Earth. But it doesn’t stop there, as we are growing everyday. Groups of teens have clubs where they spend hours a week brainstorming new Eco-friendly strategies and ways to get their peers to care more about their environmental footprint. Perhaps the most revolutionary realization by man was that we can use the sustainable, natural resources from this planet to generate power. Life depends on energy, so how incredible is it that we discovered ways to never run out of it? Through the use of less-polluting energy sources such as thorium, natural gas, wind, solar, and nuclear fusion, we can have as much power as we want, without consequences. All of these natural phenomena reduce environmental damage and generate power wonderfully. Advancements like these have been discovered recently, imagine what the future has to hold.

Notice how many positives we have contributed environmentally to this planet, that we often skim over? It’s inspiring how every minute, we are advancing more and more into environmental friendly growth. The future looks bright when you notice our significant changes in only the past few years. By continuing sustainability efforts, we are heading into a direction where we can save the heart of society, mother-nature, from collapsing.

Insurance of Green Buildings – The Implications

Insurance of Green Buildings – The Implications

To waste, to destroy our natural resources, to skin and exhaust the land instead of using it so as to increase its usefulness, will result in undermining in the days of our children the very prosperity which we ought by right to hand down to them amplified and developed

-Theodore Roosevelt

 

Roosevelt was not attempting to carve out a space for himself in the subject of environmental conservatism. He had amassed plenty of significance in that arena of policy already. No, he was simply and nobly concerned with future generations. Since the environment affects us equally, why not look at one of the most revolutionary conservation approaches and how it could possibly affect your bank account once you decide to adopt it. Let’s explore green buildings and the challenges that these pose in terms of specifically insurance and securities.

Sustainability is the way to go for the sake of our beloved planet. Sustainability does not necessarily mean conservation, though. There is so much talk about resource conservation and the appropriate precautions to take. Every Tom, Dick, and Harry is expected to be at the forefront of advocating or implementing energy-saving initiatives at the household, community, and institutional level. While this is certainly a way to go in terms of getting as many people actively involved in conservation efforts as possible, it is imperative to understand the financial implications of these efforts as related to green construction. Green buildings have a lot of benefits, the U.S Environmental Protection Agency (EPA) notes that green buildings have not only environmental but also economic and social benefits. It’s proven, so why not participate in conservation and make your next home a green building! You can get further insights on the particulars of green building as listed by the U.S. EPA here. Besides these points, there are other important considerations as highlighted by Catherine Mohr

 

Green buildings are beginning to enjoy mainstream adoption and success. With this development come many insurance issues that are of concern in every aspect of green building. As an interested individual, you are required to be familiar with the forms of related insurance. Insuring a green building requires an understanding of a form of insurance known as green insurance that aims to cater for unforeseen and un-anticipated risks. It has incorporated extra considerations to traditional forms of housing insurance. Some of these green insurance concerns are damageability, rating issues and availability of building materials. For the sake of being on the safe side after the occurrence of a risk it is better that you, an earth lover, fully grasp the dynamics of the green insurance.

Other forms of housing finance differ considerably from green insurance. It is important for insurance underwriters to consider that it takes more time and specialised materials to repair malfunctioning components of green buildings. Linda Kornfield observes that the time elapses while searching for appropriate materials for each building and the repair duration. Usually, as the owner of the green property, you will need to pay for the difference between the repair of a standard house and that of a green building. In the future, insurance policies for green building will need to cater for replacement of the malfunctioned parts of the cost of a new creation. Some elements of green building pose additional insurance considerations since they tend to cause additional risks or reactions. An example is the inclusion of vegetative roofs and fuel cell technologies. The interaction of these technologies with other components of green building is uncertain but also a risk for consideration for insurance underwriters. Already, there are claims of unexpected interactions giving rise to the “green gaps” that can cause damage. Insurance underwriters, now and going forward need to factor these uncertainties. This is likely to see the insurance cost for green building rise than the traditional house insurance.

Vegetative Roof

Pretty and green, but safe and secure?

Insurance coverage for green buildings will also needs to factor the recertification costs in the event that a green building sustains extensive damage. You might ask, what is the role of recertification and is it necessary? The role of the recertification is to document the levels of green guarantee required while making the repairs. These costs meet the demands of expert consultants, engineers and other workforce need for designing and reconstruction. Insurance underwriting will also have to factor the recycling and debris removal costs. The materials to be recycled need to be separated before they are sent to a certified recycling establishment. These extra costs in separating the materials from the damage of a green building need to reflect in the insurance policies.

According to Erik D. Nevala-Lee, underwriters need to include other common hazards in green insurance policies in the near future. Green buildings are being used increasingly for business purposes. Therefore, it is not only critical and appropriate for the policies to have additional coverage for business interruption losses now going into the future. The typical business interruption policies seek to pay the profits foregone during the period that the business was not operational. Green buildings will normally take more time to repair or replace. Kornfield asserts that the period of indemnity is longer since the construction of green building must comply with certification and probably use special consultants or tools. Therefore, considering the time taken to get a business back in operation is and will be important for policy considerations. However, you will have to dig deeper into your pocket. As the insured will have to pay more in expectation of the unique dynamics of operating a business in a green building. This is so if the rebuilding process is to be within the green certification standards.

Green-Magic-Homes-110

The future of green buildings? Maybe – but this comes at a price for insuring the values here. How do you replace materials when damaged? What sort of follow-on effects are there in these houses that would not be present in regular building blocks or villas? Hard to tell, so hard to insure.

Another future insurance consideration for green building concerns contractual risks that emerge from rating issues. With each level of certification of green buildings, there are expected performances. If the expected performances are not in line with the level of certification pursued, there are consequences. Insurance underwriters need to be aware of these consequences and use them to devise policies that factor the same. There is also reputation damage that emerges if the green improvements do not end up giving the expected performance. However, it is imperative to note that the care of green buildings is constantly changing and makes it difficult for insurance underwriters to substantiate a claim. There may be different considerations that makes it difficult to distinguish a normal and a “green” claim. For instance, a green building may have attained a LEED Silver certification but experiences a poor performance of its ventilation system. It could be that the system was designed poorly. While some may call it a green claim, it is essentially a normal claim caused by the mechanical engineers designing the system. This implies that the rating system does not offer a solid provision that all resulting claims will be green claims. Insurance underwriters will have to work with skilled consultants to eliminate the ambiguity in classifying the claims resulting from green rated/certified buildings.

Summing it up, green buildings pose a unique set of risks. Additionally, there are evolving ways of maintenance of green buildings. This present insurance policies makes with unique set of risk exposures for considerations and some ambiguous claims. Essentially, insurance underwriting, going forward, will need to consider that green buildings require specialized consultations and engineers, special building materials and take more time to repair. Additionally, the future policies should include unexpected risks of interactions of some of the green building materials while designing the insurance policies. There should also be policy considerations for business interruptions and poor performance of some elements of the green building based on their rating expectations. The insurance considerations in green building evolve over time as new challenges and opportunities emerge.

Do you have a green building project that is proving challenging to insure or otherwise secure? Are you concerned about how safe vegetative roofing or rainwater filtering really is for you and your kids?

Global Agro-Science

Global Agro-Science

Populations are growing exponentially, we’re going to cross the maximal yield of the earth yesterday and we can never feed the human population adequately and sustainably without entering mass caloric deficits! Agricultural capacity is simply insufficient and impossible to ethically improve. – unknown masses

Sound familiar? It’s the song of panicked environmentalists around the world, convinced that we are about to run out of resources, and that we have already crossed the threshold for what is possible – collapse is imminent, it’s a miracle the planet has not imploded!

Let’s pause, chill, and examine some perspectives on the future of farming and agriculture, and how we can overcome the challenges we face today.

Let’s begin with the assumption that global populations are skyrocketing exponentially. If this was the case, after all, the future does indeed pose many great challenges, simply managing this population growth. You may be familiar with the work of Hans Rosling, and the Gapminder project.

We live in a world of relentless change, huge migrations of people to new megacities filling soaring skyscrapers and vast slums. Ravenous appetites for fuel and food, unpredictable climate change, and all this in a world where the population is still growing! Should we be worried? Should we be scared? How to make sense of it all? – Hans Rosling

The first point addressed in the video below (Don’t Panic, The Facts About Population), is population growth. The world population has increased approximately exponentially since around the time of the industrial revolution, from 1 billion in 1800 to 7+ billion in the 21st century. However, what about the future? What about right now? Rosling bases his work on hard facts and statistics, and explains it better than anyone, so watch the video and become smarter on global population growth.

The core of it is this: Don’t panic, a cultural shift in the attitude to population growth (family, contraceptives, wealth, free time) is underway, and the curve is flattening.

 

For an even deeper look into the wealth and health of nations as presented by Gapminder, check out this interactive graph (it’s pretty radical): https://www.gapminder.org/world

But – even with population growth slowing down, health and wealth improving, and positive change in the world – should we sit back and expect things to just happen?

No – most certainly not. We have an obligation to examine, test, and creatively advance our society, and what better way to challenge ourselves collectively than with how to provide enough food for all of the world’s population?

Andrew Youn suggests three major levers to achieving the noble and totally achievable goal of ending world hunger and removing large portions of rural societies out of poverty and into modest prosperity for starters.

  • First he notes that 50% of the worlds poorest people are farmers. Not only that, they are managing their crops sub-optimally (using bronze age tools and methodologies in many cases) with room for large gains with the right equipment, farm inputs (fertiliser comes to mind!) and education.
  • Secondly and very happily, we know what needs doing to improve output. We have the tools, the blueprints, the plans and the inputs, so it’s just a matter of sharing.
  • Third, and most difficult, is optimal delivery of modern agricultural technology to rural areas in far removed locations like subsaharan Africa. Watch Youn’s TED talk on the subject below, and then let us push on with ways to achieve delivery, and whether to aim for Youn’s modest delivery or much more ambitiously revolutionise global agriculture to high tech standards.

 

 

Possible outcomes:

  1. We see the successful funding of programs like the One Acre Fund, and the democratisation of knowledge about agriculture and productivity at the basic level. People are no longer hungry, there is food to eat.
  2. Programs like the One Acre Fund fail in their mission – corruption, theft and general criminal behaviour undermines the profits and production of the farmers, and conditions do not improve. (This one depends largely on what else happens in parallel to wealth on a national level – if it is elevated, this outcome becomes less likely)
  3. We leverage the creativity of 500.000.000 people to improve agriculture globally. SAY WHAT?

In the beginning, foreign aid and non profits was giving finite resources to poor populations for consumption. Hungry? Have some bread. Cold? Here is some oil to burn.

In more recent times, initiatives have changed for the better, to focus on renewables rather than consumables, or at least consumables that last much longer. This includes initiatives like Youn’s One Acre Fund, it includes educational programs, schools, clean water in taps etc. etc.

Very recently, something else has happened though, with vast benefits and largely still untapped potential. Microfinance, investing capital in extremely poor populations, and changing the future through business and enterprise. Studies uncover measurable impact on 6 of the 8 Millennium Goals! That means Microfinance is contributing to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality, reduce child mortality, improve maternal health, and much much more.

So – why does this work? Because human creativity is the ultimate resource, and by starting enterprise and promising reward for effort, human creativity is kickstarted. Can we go further though? In the US there are way less than 5 million farmers. Is it conceivable then, that given the opportunity, the access to information and by sharing our creative space with 500 million poor farmers (as Youn states in his video we have access to), we could advance the way we pursue agriculture and farming exponentially quicker as a function of how many human minds were pouring their creativity into the project? Why stop at some fertiliser and modern yield management techniques? Why not a global intelligent farming initiative? Massive automation, intelligent irrigation, fertilisation, and hands off automated harvest? What about the agriculture of tomorrow, which we can’t properly imagine today?

How?

  • Connect – instead of just providing materials and tools, provide connectivity and access to the internet (via phone, tablet, PC). This shares our cumulative creative canvas, allowing it to expand globally instead of “locally” in the west. Non profits can do this, major philanthropy can do this, or Microfinance institutions can do this, it is in each of their interests.
  • Compete – Microfinance has the advantage (for capital returns) that it is selective. You find and finance the initiatives you believe in. However, for a free competitive market, everyone must have equal opportunity to advance. So, instead of outreach for investment, Microfinance must adopt an ever more open door application policy, and an educational role. Not everyone is an entrepreneur, that will not change, but creativite output from any individual is many times a function of several complex external factors such as being physically networked, under competition and pushed to change by some external agent – among other things. Facilitate this sort of environment, and democratise the global creative canvas.
  • Challenge – to rise above, to better the world not just the farm, to make new. 500 million poverty stricken human beings, 500 million potentially world altering creative inputs on how to improve yield, reduce work time, automate etc. etc. The new growth hackers of farming.

Choose the future

Who though? Well, western agricultural lobbies, institutes and corporations perhaps – creating competition for yourself can be bad, but expanding the rate of innovation by potentially x100, that has to be worth something, that human advancement has to be worth more items in the marketplace for you to compete with.

Reach out to One Acre Fund or a similar foundation and ask how you can help to connect people to the creative canvas, spark competition and embark on a new journey of invention!

When you have it good, it is easy to sit back and accept standstill, your steady earnings, your comfortable life. But meanwhile there are advancements to be made, and a future to be building. Be a part of it. Share this with a farmer, landowner, or awesome friend!