The African Enterprise (20/09/2021)
Our bias for beauty, Apple to the Creator class, Superpower in error-causing.
Greetings from Abuja.
I published a short essay Fix boat or change boat. One that I started after reading Confidence Game - How hedge fund manager Bill Ackman called Wall Street’s Bluff by Christine Richard.
In Confidence Game, Christine Richard wrote about Bill Ackman's bet against MBIA - a triple-A-rated bond insurance company. A type of company that insures the kind of debt described in the Evergrande case (if you’ve been following the news) by a variety of financial vehicles. After doing a lot of research on the company, Bill Ackman figured that the company was to be downgraded because its ability to maintain zero losses was illusionary. He tried for many years to prove the results of the research but was shut down at every stage - even investigated for trying to manipulate the market. It took several years for him to be proven right.
After reading the book, I scrolled through Bill Ackman’s feed and saw a thread on SPARCs where he tweeted "If you find yourself in a leaky boat, oftentimes you are better off switching boats than patching leaks to complete the mission"
This statement was intriguing because he was on an actual leaky boat on MBIA (money managers, analysts, accountants, regulators, and even his people deemed it futile) but he stuck on. Patching it to complete the mission. But in this case, he was going to switch boats.
“How do you decide when to fix or change boat?” I wondered.
Building a business, a brand, or just about every endeavor is like setting a boat to sail. It can be and feel like slowly going nowhere at great mental, financial, and emotional expense while hanging in a pendulum between excitement, anticipation, and frustration. It can be "stuck in a leaky boat." So how do you decide?
Coolest things I learned this week
Our bias for beauty
In his essay The greatest privilege we hardly talk about: Beauty, Saeid Fard writes about the "exorbitant" benefits of being attractive.
Initially, I thought the word exorbitant was a stretch but then I saw some of the advantages that accompany the privilege.
1. Attractive people are more likely to be seen as competent and be hired for a job (Busetta, 2013).
2. They are perceived as smarter and having more social grace (Kanasawa, 2010).
3. They are perceived to have better personality qualities like trustworthiness (Dewolf 2014).
4. They are perceived as kinder (Snyder, Tanke and Berscheid 1977).
5. They are more persuasive. They’re more likely to benefit from acts of kindness from a stranger. And have greater self-esteem (Thornton, 1991).
And the advantages even spill into criminal sentencing
6. Unattractive people received 120–305 percent longer sentences than attractive people.
It is even more of a factor than race. 10 times more important.
I strongly recommend reading Saeid's essay.
Apple to the Creator Class
On the day Apple released the new set of iPhones, there was a lot of talk about the company releasing just about the same as was released a year ago at a steeper price. Several reviewers piled on about the company losing its innovative ideals and being a serial recycler.
The merits to those points are not for me to debate, but I think Apple is the one company that is seeing the opportunity and the moat to be built around the creator class.
When I watched the phone's film, I saw a response to the needs of content creators. Across TikTok, Instagram, and Youtube; millions of people put incredible hours into making, editing, and consuming pictures and videos that zip around the world.
What do you believe that essential and growing class of people, consumers, need most? Khaby has grown his following to a combined total of over 110 million by making short comedy skits where he sarcastically ridicules people who complicate simple things. What would Khaby need most in his device?
I'll have a crack at it:
Better Camera -for better quality content
Better pictures and video editing capabilities - it’s astonishing how much work they put into editing their work.
A faster phone with better connectivity to share their work
More storage to house all that content
A more durable and resilient device that enables filming and clicking anywhere.
Apple ticks all of that with the new devices. Even better than the last ones did.
Product improvements that become service improvements.
Our superpower in error-causing
We, according to Charlie Munger, possess a superpower in error-causing. This superpower is because of our inability to accept new ideas when it requires us to displace previous ideas we hold.
Avoiding errors often means accepting new ideas at the cost of old ones.
One way around it is asking: “When is the opposite true?”
This simple question is often the difference between exercising our superpower in error-causing and avoiding an error. It helps to realize holes and gaps. It is exposure to another point of view.
That’s it for this week.
If you have any thoughts or questions, hit reply and we can have a chat. And if you enjoyed it, share with friends.
Till next week,