The Catalyst, Watson and Spacs
Three pieces that I found interesting:
There are two types of books. The first type are the ones that captures original research (I count Why We Sleep and Thinking Fast and Slow among these, and to be fair there are many more). And then there are those that summarise the original research, combine original research encapsulated in different books, and refer to the same papers but in a different light. Examples include Sleep Smarter and How to Change. Though the first ones make for an absolute fantastic read, the importance of the second type of books cannot be discounted for two reasons: one, they make for a lighter read, and second, they bridge the gaps between different research pieces and provide a taxonomy to better understand these often unrelated concepts. A recent book that I read — The Catalyst — falls under this second category. Authored by Jonah Berger, this book aims at creating a simplified model to bring together all strategies that one can employ to cause a change (hence the title of the book). The change that we refer to here includes changing habits and beliefs of people and organisations. To encapsulate the research — to reiterate, none of which is an original research — Berger suggests a model call REDUCE which stands for the pushbacks that we may face on the change journey, for example, Reactance, Endowment, Distance, Uncertainty and Corroborating Evidence. Berger then goes on to list different strategies to address each pushback. For example, to address Reactance, strategies may include the time-tested approach of giving options to choose from instead of shoving down your preferred option, leveraging cognitive dissonance, and asking (rather nudging) than telling. The book made for a quick read and I would still recommend it for the simple reason that it brings together all the change approaches under one umbrella.
Remember IBM Watson? This piece does a good job in detailing out how the original grand ambition behind Watson has now been watered down to a more reasonable one. While there were many hopes from Watson (for example, recommending treatment options), it failed to perform on those sky high expectations. One reason that the essay suggests led to those expectations was that the IBM’s marketing engine took over and the voice of reason from the scientists was ignored. Now a watered down version of Watson is seeing some success in initiatives tailored to its capabilities, for instance ‘quickly ingesting and reading many thousands of medical research papers’ and small scale automation. I had almost forgotten about Watson before this piece came out and it served as a good reminder that it was only four years back that there was so much noise around this initiative.
SPACS are falling short of their promises, so claims this essay in FT. Smaller companies eyeing the equity market for funding have the option of merging with special purpose acquisition vehicles, called SPACS, to avoid the lengthy and cumbersome process of going public. SPACS have had a successful run lately, and there was an increase of 30% in the listing of SPACS. But some, including authorities, are questioning the structure. “Because there is no precedent for them, they can take on risk that is not readily recognised,” says a source quoted in the story. To return to the main question — do SPACS serve the purpose of being a cheaper and efficient way to get to the market? According to a research on 47 SPACS, this is not the case as some of the costs are hidden, and some of these shell companies “consumed one-third of the cash they raised, or 50% of the money they eventually deliver to the companies they brought public.” Moreover, the share prices of these shell companies tend to fall by a third within the first year of listing raising another set of concern. What does that mean? Well, more regulation may be coming in this space sooner than we may have previously imagined.
A quote that I came across:
A 99% commitment is hard; 100% is easy
