Incentive Design

PEOPLE IN SYSTEMS DO NOT DO WHAT THE SYSTEM SAYS THEY ARE DOING.

University professors chase grants, not student enlightenment. VCs nurture personal brands alongside deals. Startup founders optimize funding metrics over customer needs.

THE SYSTEM ITSELF DOES NOT DO WHAT IT SAYS IT IS DOING.

The restaurant business is actually the alcohol business. T... See more

Tina He • The Art of Understanding What's Going On

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“Gyms sell the dream of transformation while banking on the reality of abandonment.”

What really broke down in Google’s original vision is the incentive system they were building towards. There is a very specific subset of information you’re interested in “organizing” when you’re trying to serve the perfect ad.

Kyle Harrison • Building the Global Knowledge Graph: Dreaming the Dream for Roam Research

andrea

There’s this cool idea in software that you “ship your org chart” called Conway’s law: “Organizations, who design systems, are constrained to produce designs which are copies of the communication structures of these organizations” I’d offer a similar law for investors: “you… Show more

Patrick OShaughnessy

x.com

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and I’d offer a similar law for companies - your company mimics the incentives of its investors.

One thing that might surprise you about dominance is how companies get it. You might think it comes from rapacious win-at-all costs business practices, or from raising large amounts of money to snuff out competition. But we’ve found that the primary source for a company’s dominance is whether it designs its product and business model to be perfectl... See more

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