1 min read
1 min read
The coffee machine at work fills the cups so that they’re about two thirds full. Since it’s an all-in-one latte machine, it dispenses hot water first, an espresso shot second, and then milk last. The guy in front of me thinks he’s being clever by pressing the cappuccino button twice. Rookie move. After his first cappuccino is dispensed, his cup starts overflowing with boiling water. He turns to me, with wet, burning hands: “Bollocks. Story of my life.” He takes his watery cappuccino back to his desk; the machine dispenses the espresso shot and milk all over itself.
1 min read
I'm currently re-taking a class called Model Thinking by Scott E. Page of the University of Michigan and he mentioned a website called "Opposite Proverbs." It's a list of pairs of proverbs that have opposite meanings.
It's pretty amusing.
1 min read
Though I think economics has a ton of great models for understanding how the world works (though some are a bit shit), I've recently been trying to broaden my understanding of the models used by other disciplines (statistics, maths, natural sciences, sociology, etc.). This article (sent to me by my dad) is an extensive list of mental models. Really worth checking out.
6 min read
I don't like to post publicly about myself because it feels imposing. Old, narcisstic Facebook posts make me cringe really hard. But today I felt like 9 years of pursuing random interests came together and I really want to share it.
When I was 10 years old, I started playing Runescape. I loved the game. What I loved most was being able to trade with other players, learning how the different markets in the game operated, and using that understanding to increase my in-game net worth so me and my brother could buy cool armor and go on adventures. This is still true, but cool armor has become secure housing and investment portfolios and adventures now include traveling and trying new foods together. I inadvertently developed a deep interest in markets. I also learned how to type real quick because of all the "shouting" I made my character do in order to trade with other players.
When I was 14 years old, I started playing Team Fortress 2. I also loved this game. I was addicted to trading and analysing the in-game economy. So addicted that I would stay up until 4am updating my trades on auction sites while spamming the chats of trading servers. I still remember the value of pretty much every tradable item in the game. My grades and extracurricular involvement predictably tanked. I regretted and beat myself up for it incredibly hard at the time.
The summer after my sophomore year in 2012, my wonderful dad encouraged me to apply to deliver an Ignite speech at the Google I/O web developer's conference in San Francisco on what I learned about economics from trading on Runescape and Team Fortress 2. I didn't realise what I was committing to when I sent a pitch to the Ignite committee. I have never felt so surreastically nervous in my life before getting up stage to nerd out in front of 800 people. I don't think I would've gone up if it weren't for the years my mum devoted to getting my very shy self involved with theater performance and public speaking from a young age. When I walked off that stage, I remember thinking that I'd said all the interesting stuff I had to say in the world and that it was time to learn some more interesting stuff.
This was a tipping point for me. I started reading tons of economics books and taking tons of online classes in economics and finance. My interest in economics stemmed from my interest in markets, which stemmed from my interest in wanting to know how the world worked. I became particularly interested in behavioural science after taking a MOOC in Gamification from Prof. Kevin Werbach, and subsequently beginning to read the canon of Thaler, Sunstein, and Kahneman.
These interests somehow managed to land me a spot at the University of Warwick to study Economics. The circumstances make me laugh. I learned of the school 5 minutes before sending off my UCAS by shamelessly googling "uk university rankings in economics" and almost withdrew my application when I got rejected by every other school on my UCAS list. I lucked my way into an incredible economics department at a school I had never heard of. It was so surreal that the first month I was there I kept thinking the school was going to go belly-up and the degree would be worthless. It seemed too good to be true.
In the summer following my first year, I interned at a real estate investment firm. I learned the fundamentals of real estate investing, and had a great deal of exposure to all sides of the business including marketing, CRM, bookkeeping, website management, client outreach, data analysis, and more. It was an incredibly thorough grounding in the general workings of a business on a small enough scale that I was able to interact with all of its aspects. I tried to learn as much as I could.
Throughout the whole of 2nd year, I had no idea what I wanted to do. I applied to a few places for internships but my heart wasn't really in any of them. I changed my career ideas about twice a month. I've always had trouble committing myself to things where I couldn't see the bigger picture. I hate feeling extrinsically motivated to do things. I eventually stumbled across financial technology through my wider reading and became fascinated. I would spend hours a day researching the fintech ecosystem. I eventually decided that I wanted to get experience working in the fintech space.
I first learned Property Partner existed by reading a Business Insider article saying they had secured a huge sum of money in Series B funding. My curiosity was piqued, so I went on their website, and went to the careers section. I noticed they were hiring for a graduate placement position, which I wasn't exactly the perfect fit for, but I figured there was no harm in applying. I sent my CV, a letter of recommendation, and a short cover letter. I then completed two "challenges" -- a 300 word investment case pitch based on a sample property they were soon to release on the platform and to estimate the number of letting agent businesses in Spain. I sent these back and was invited to a graduate assessment day. At this point the jig was up; I sent them an email saying I was interested in an internship and not a graduate placement. I got a phone call saying they were interested, went in to be interviewed, and got the internship I somehow created for myself. YES! I had somewhere to work for the summer!
Today, I started work at Property Partner. Throughout the day, I realised that all the skills I had been developing over the years really came together. My understanding of real estate markets and trading platforms gives me a useful background in understanding the dynamics of the primary and secondary markets of the platform. My own self-study into behavioural science and economics has given me the skillset to understand consumer insight analysis, choice architecture, and general growth hacking techniques. My exposure to CRM systems and web-development tools has given me the skillset to understand effective web marketing procedures.
I'm amazed by how my general curiosity lead me to this. It's nuts how pursuing seemingly disjointed interests can come together. I don't think I could be happier about where I'm working this summer. I'm so excited for the next 3 months.
Life can be real groovy.
5 min read
Blockchain technology has been a hot topic in the finance world for the past year. In order to keep abreast of current trends in the financial services industry, it is critical to understand how the technology works, who the big players in this new industry are, and how this new implementation is at odds with the technology’s original culture.
Brief explanation of blockchain technology
In simplest terms, the blockchain is a means of storing information in a public ledger so that transactions between parties can be verified. Each time Bitcoin is sent and received, the time-stamped transaction is recorded in a set of transactions called a block. Every transaction must be digitally signed using a private key, which serves a similar function as a pin number. Each block is created as a result of solving a mathematical equation called a hash function. The people solving these hash function equations are called miners, and for each block they create they receive a per-block reward as well as the fees offered within the transactions themselves. Each block contains the hash from the previous block, which links the blocks together, forming a chain. Each node (computer connected to the Bitcoin network) contains a copy of the blockchain, which allows new information to be recorded in each node and broadcasted to other nodes. The value of this is that it does not require outside verification to validate a transaction. With every party having full information of all previous transactions, there is theoretically no need for a regulatory authority. Furthermore, the hash function becomes more difficult to solve over time as an automated means of hedging against inflation in Bitcoin.
Why firms are interested in it, and who are the big players
Many Wall Street firms are interested in the application of blockchain technology to streamline the administrative process of complex financial transactions while also automating trust in financial markets. Championing the charge, Blythe Masters, former head of global commodities at J.P. Morgan, key player in the development of the credit-default-swap, and current CEO of Digital Asset Holdings, sees blockchain technology as a means of reducing the transaction costs associated with an array of financial transactions. Through their acquisitions of Hyperledger, Bits of Proof, and Blockstack.io, she and her partners at Digital Asset Holdings see the potential for private blockchains, separate from the Bitcoin network, to expedite the process of verifying syndicated loans, U.S. Treasury repos, and equity shares in private companies. Masters and JPMorgan have recently begun trialing the efficacy of blockchain technology by testing its functionality with respect to loans. So far, they are pleased with the results. Aside from Digital Asset Holdings, there are a plethora of companies applying blockchain technology to other areas of finance. The London-based firm Real Asset Co. has created their own gold-backed cryptocurrency called Goldbloc and are allowing their customers to record their bullion on the blockchain. The London startup Everledger is applying blockchain technology to diamonds and eventually other commodities like designer bags, fine art, and high end watches in order to combat fraud. Nasdaq is looking to the blockchain to create a system for trading shares. The San Francisco based firm Chain is creating tools that allow companies to use the ledger to exchange virtually anything, including airline miles. With blockchain technology disrupting the financial services industry, the possibilities appear endless. However, it is important to consider how these applications deviate from the roots of Bitcoin.
How it’s at odds with the reason Bitcoin was invented in the first place
Beyond the hype surrounding the blockchain and its industrial applications, it is critical to be reminded of the fundamentals on which Bitcoin and blockchain technology were created in the first place. In the blockchain’s recently heightened publicity, the principles of Bitcoin are rarely discussed. One of the biggest selling points of Bitcoin is that it is a decentralised cryptocurrency, free from the political pressure of traditional currencies and central banking authorities. It is a currency designed to replace financial institutions with peer-to-peer networks. This cultural identity of Bitcoin is important; it is a culture of transparency and collaboration that embraces the use of technology. This appears to be at odds with the perceived culture of the financial services industry, whose major profits have historically stemmed from the exploitation of asymmetry of information. Joi Ito, director of the MIT Media Lab, Chairman of the Board of PureTech Health, and board member of the Sony Corporation, New York Times Company and others, is concerned about the cultural disconnect between the Bitcoin core and those with a vested commercial interest in the technology. He defines the Bitcoin core as the small number of people who fully understand how cryptography, systems, networks, and code operate within the Bitcoin framework. It is comprised of the individuals who helped create the network and have a vested interest in it for its own sake. He argues that there is over investment in the Blockchain space with less communication than there should be between between the creators and investors. This communication gap is discouraging developers, leading them to drop out, which severely undermines any potential that blockchain technology may have. Without the Bitcoin community, blockchain technology could devolve into an iteration of the current transaction system, lacking the trustless networks and decentralisation that characterise it. An open discourse between the original developers and those seeking commercial applications for the technology is critical.
Collaboration is key to the successful use of blockchain technology
While the innovative application of blockchain technology to the financial services industry is excitingly disruptive, it is creating a rift between the original developers and those just now seeing the merits of the blockchain. It is imperative that these two groups communicate clearly to resolve these tensions so that the potential gains from this innovation can be realised.
6 min read
What is Gamification?
Gamification is the application of game mechanics and game design techniques in non-game contexts. It is usually applied as a means of increasing customer engagement with services and encouraging beneficial societal behaviour by governments. In its very simplest form, it is an online marketing technique that uses elements of games like badges, points, and leaderboards to motivate people to engage with a service. The first example of the term comes from Professor Richard Bartle of the University of Essex in 1980, but it has become popularised over the past 6 years through its application in mobile applications and on the web. Kevin Werbach, professor at the Wharton School of Business and co-author of “For the Win: How Game Thinking Can Revolutionize Your Business”, released a free MOOC in Gamification on Coursera in 2013 in order to explain the theory and history of Gamification in conjunction with its real world applications. Gamification has received some criticism, notably in an article published in The Atlantic titled ‘Gamification Is Bullshit’, but its roots are grounded in psychology, management, and mechanism design theory. Werbach notes that Gamification is very challenging to successfully implement without it coming off as gimmicky. Nonetheless, its application has been successful in increasing customer engagement, employee engagement, and promoting social good.
Applications of Gamification in the Real World
The applications of Gamification can be seen everywhere. A shining example of applying game aspects in business contexts, Swarm (formerly FourSquare) is renowned for providing its users with badges for “checking in” to restaurants, museums, parks and the like, and for creating leaderboards that allow you to compete with your friends as to who has checked in to the coolest (or most) places. Those who check in the most at a certain location are dubbed mayor, and are given discounts by cooperating firms, like a coupon for 15% off their next latte. The financial reward of habitually using the service is secondary to the engaging, game-like aspect of the service, which encourages users to interact and compete with one another. In addition to the external, consumer-based business applications of Gamification, firms have applied Gamification to engage their employees internally. An example of this is the Windows 7 “Language Quality Game”, which encouraged Microsoft employees across the world to assess the localised versions of Microsoft systems in different languages. For every improper use of syntax, grammar, or spelling that an employee spotted, they earned a point and were ranked on a leaderboard across the globe. While the task itself was mundane, the competitive element of the task encouraged over 4,500 people to participate, reviewing over 500,000 dialog boxes, finding 6,700 bugs and hundreds of significant fixes. In addition to encouraging customer and employee engagement within firms, Gamification can be used as a means of promoting societal good. Volkswagen released a campaign in 2010 called “The Fun Theory” in which it attempted to encourage beneficial behaviour through turning mundane tasks into enjoyable activities. They designed a staircase to look like a piano at an underground train station in Stockholm that played music as people walked up it. This promoted public health by encouraging people to take the stairs rather than the escalator. They also designed recycling bins to play a sound (like that of an anvil falling off a cliff in a cartoon) every time somebody dropped a can or bottle in the bin. Most notably, Volkswagen partnered with the Swedish National Society for Road Safety to discourage speeding and encourage obeying the speed limit. They set up a speed camera that photographed drivers’ license plates on the road, penalising speeders by issuing them a fine. They then placed the money collected from speeding fines into a lottery to be won by those who were photographed obeying the speed limit. The applications of Gamification range from those designed to encourage customer interaction, employee interaction, and societal good, but not without criticism from sceptics.
The main criticisms of Gamification are that it oversimplifies the engaging elements of games into a silver bullet solution to a company’s desire to make sure its marketing and customer relation strategies are successful. Sebastian Deterding, a designer and researcher at Hamburg University, argues that Gamification fails because it is presumptuous about the nature of games and behaviour of people. He argues that games aren’t fun because they’re games, but that games are fun when they’re well-designed. He also posits that competition isn’t for everyone, novelty is not the same as engagement, and that video games are intrinsically motivating, not extrinsically rewarding in the way Gamification is assumed to be. His strongest critique is that Gamification practices distract individuals from performing the task itself. To this end, he references a challenge BMW implemented that encouraged drivers to beat fellow drivers in reducing their fuel consumption, leading to car accidents by distracted drivers. Ian Bogost, a designer, decries Gamification as “Exploitationware”, critiquing the language of Gamification itself. He argues that using the word “game” implies that the implementers of Gamification possess some sort of mysterious power as good games are difficult to make, and using the suffix “-ify” implies that the process of gamifying is relatively straightforward and simple. Jane McGonigal, a notable game designer and researcher, has distanced herself from the word Gamification and instead refers to situations where the gameplay itself is the reward as “gameful design.” These critiques are valid in the context of 2010 and 2011, where companies were proliferating points, badges, and leaderboards under the assumption that it would drive user engagement. But Gamification has since been refined in practice. Prof. Werbach himself denounces the simplification of Gamification to points, badges, and leaderboards. A truly gamified system successfully engages the user with the activity and does not simply motivate the user to achieve external rewards.
Good Gamification is good, bad Gamification is bad
Successfully implemented Gamification has profoundly beneficial implications for creating public good by making mundane tasks engaging, though a thoughtless gamified system has very little positive benefit.