Evaluating levers

https://reactionwheel.net/2019/09/a-taxonomy-of-moats.html
One of the strategic tasks of an innovator is to deter imitation for as long as possible.

Moats draw their power to prevent imitation from one of four basic sources:

• The state,

• Special know-how,

• Scale, or

• System rigidity.
  
  Benefits of scale:
  either the cost per unit product decreases or the quality of the product increases as more units are produced, sold, and used.
  
  These are examples of economies of scale, where the cost per unit is decreasing as more units are produced, typically because sunk or fixed costs are a large proportion of the total cost of the product.
  Of course, Facebook was not the last social network to succeed. Instagram, WhatsApp, and others became valuable because they picked other qualities users desired and made themselves best at those. Scale advantages are only durable to the extent they inhibit direct competition.
  
  These are advantages that arise because change is hard in a complex or highly interlinked system. If changing from one product to another also requires changing other things—other products, routines, skills, etc.—the total cost of the change may outweigh the benefits so the product already embedded in the system can maintain an advantage over similar entrant products that are not (or not yet) interconnected. I will call this system rigidity.
  
  Customers may decide to stick with a product in the face of a better product because it is expensive to switch (having learned how to use a complex software package, a user may not want to invest the time and energy in learning a new one, even if it is better) or because it is expensive to learn that a new product is better (the customer may trust a producer or its brand and learning whether a new producer or brand is trustworthy may take either risky trialing or time-consuming research.) In the first instance the cost of change must include the cost of learning or the cost of changing established work routines. In the second the cost must include the cost of searching for the alternative.

Startups can approach an industry in a way that requires a fundamentally new system, putting the startup and incumbents on the same footing. Most established companies prefer to compete by exploiting their competencies while new systems make old competencies useless.

This type of challenge to incumbents is described both by Christensen’s ‘disruptive innovation’ (imitating the innovation would require incumbents to change so many things about what they do that their current customer base would be poorly served; deciding to ignore the needs of existing customers is a very difficult decision for any management team to make) and Porter’s ‘value chain’ innovation (mimicking the business model innovation or value chain innovation of the innovator would require an established company to abandon ways of doing things that are currently successful.)

“How big is the addressable market? How many people have this problem? How many businesses suffer from this issue?

2.Then ask yourself the more important question: How painful is it? Pain can be measured by one or both of two factors: amplitude (really, really painful) or frequency (how often we suffer from it). Once you define your problem, go back to the matrix and see where it fits.”

This led him to propose two kinds of reward: primary and conditioned reinforcers. A primary reinforcer is something we’re born to desire. A conditioned reinforcer is something we learn to desire, due to its association with a primary reinforcer.

because while our biological need for the primary reinforcer is easily satiable, our abstract desire for the conditioned reinforcer isn’t.The pigeons would stop seeking food once their bellies were full, but they’d take far longer to get tired of hearing the food dispenser click.

immediate rewards work better than delayed, unpredictable rewards work better than fixed, and conditioned rewards work better

the American management consultant Charles Coonradt wondered why people work harder at games they pay to play than at work they’re paid to do. Like Skinner, Coonradt saw that a defining feature of compelling games was immediate rewards. Most of the feedback loops in employment — from salary payments to annual performance appraisals — were torturously long.

Thus, the McNamara fallacy, as it came to be known, refers to our tendency to focus on the most quantifiable measures, even if doing so leads us from our actual goals. Put simply, we try to measure what we value, but end up valuing what we measure.

We’re easily motivated by points and scores because they’re easy to track and enjoyable to accrue. As such, scorekeeping is, for many, becoming the new foundation of their lives. “Looksmaxxing” is a new trend of gamified beauty, where people assign scores to physical appearance and then use any means necessary to maximize their score. And in the online wellness space, there is now a “Rejuvenation Olympics” complete with a leaderboard that ranks people by their “age reversal”. Even sleep has become a game; many people now use apps like Pokemon Sleep that reward them for achieving high “sleep scores”, and some even compete to get the highest “sleep ranking”.

Most such scores are simplifications that don’t tell the whole story. For instance, sleep trackers only measure what’s easy to measure, like movement, which says nothing about crucial facts like time spent in REM sleep. A more accurate measure of how well you slept would be how refreshed you feel in the morning, but since this can’t be quantified, it tends to be ignored.

: the constant, momentary “wins” that come with playing digital games give us a false sense of progression and accomplishment, a neurochemical high that feels like victory but is not, and which, if it becomes a habit, risks placating our ambitions to pursue true fulfilment.

All the things a gamified world promises in the short term — pride, purpose, meaning, control, motivation, and happiness — it threatens in the long term.