Issue #159

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This is issue no. 159 of 180. The last issue had a 39.57% open rate with 🔥17.23% of you visiting this article on how Groove built a $5M/year business in three years with content marketing. John Oliver on Multi-level Marketing (video). And whatever your politics, please do your civic duty and vote today 🇺🇸.

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Today's Top Intelligence (10 Reads)

Last Word: Serendipity Through Technology

When you're operational for a long enough time, you begin to lean on the direction and advice of others while synthesizing your own knowledge into actionable steps, less and less. The 'why' for passionately curating and writing a daily letter like this is broken down by Venkatesh Rao in a way that I never could. The simple enough answer? 1) Serendipity 2) Compounding knowledge. Read how this all works through the eyes of an eloquent writer, equipped to explain the nuances of leaps in knowledge - an outcome that I've wanted for all who read 2PML on a daily basis.

Via Breaking Smart by VGR

To parlay something into something else is to turn a small advantage into a big one via a sequence of unplanned, but not unanticipated, gambles. It is the essence of finding serendipity. In an environment shaped by exponential change -- Moore's Law or gene sequencing for example -- parlaying is a survival skill. Parlaying is the opposite of planning. In planning you deliberately sequence near-certain things in advance, to create one future, and plan on breaking nothing along the way.

In parlaying, you daisy-chain bets to create an expanding range of positive possible futures. You pick the most interesting bet at each stage, and expect things to break along the way. Agility is not just the best approach to parlaying, it is the only approach. The point of operating via iterative trial and error is to predictably create parlaying opportunities, not just fix errors or "test" things.

You've heard the term "a rolling stone gathers no moss." I like to think of agile parlaying as "a rolling snowball grows bigger." Each pivot is potentially an opportunistic level-up of some sort, not just a course reset. Imagine a snowball rolling downhill. It can grow huge and even trigger an avalanche. But it also breaks and destroys things on its path. Facebook's old slogan, move fast and break things, isn't two statements. Where fast is calibrated at "fast enough to stay on top of an exponential environment," the break-things part necessarily follows.

The key is to try and gain some control over where you're making compounding gains, and where you're breaking things. Trying to choose a locus of compounding and a locus of destruction is of course a bit like steering a snowball in which you're trapped (I prefer this to the older metaphor of having caught a tiger by the tail). For individuals, typically you can either let knowledge potential compound and action potential fragment, or let action potential compound and knowledge potential fragment.

If you do the latter, your knowledge potential will fragment into a cloud of tweet-sized aphorisms. But your capacity for action will get very high. If you do the former, you will end up with high knowledge potential. But your capacity for action fragments, and all you can do is small things here and there. Most likely, you will swing between the two extremes. Sometimes your action potential will be very high and your knowledge potential highly fragmented, other times your action potential will be very low and your knowledge potential will be very high.

Operating in exponential environments therefore, can feel like periods of blindly swinging a sledgehammer interleaved with periods of being to see and understand everything but being bound and gagged. But so long as something, somewhere is undergoing compounding positive change, and you're parlaying X into 3X every few years, you're in the game. Compound interest is the most powerful force in the universe, as Einstein said, but in 2016, interest rates are heading from zero into uncharted negative territories.

It's not obvious in 2016 how to harness compound interest. But you should probably be looking somewhere other than the financial world for your compound interest fix. If you find a compound interest dynamic to ride, you have a snowball's chance in hell of coming out ahead in our world. If you don't, you might well find yourself in the stagnating in the liquidity trap of your own life, if you'll excuse the terrible mixed metaphor and pun.

Dr. Seuss described this condition poignantly as the waiting place. In this case, we're talking waiting around for the Internet Age to offer you a "job", instead of making one up for yourself. Non-agile change models are not capable of staying on top of exponential environments because they don't involve serendipity parlaying.

If you can't be agile, you just have to exit the exponential environment, hide somewhere and hope change doesn't find you. If you're unlucky and change finds you anyway, you'll find yourself on the wrong side of serendipitous parlaying of gains: zemblanitous parlaying of losses all the way to doom. So if you can't answer the question, where am I compounding, where am I fragmenting? you should be worried. Very worried.