This is a quick template for a cold e-mail that can be used for initial reconnaissance and information gathering for a software engineer/entrepreneur that would like to break into a new industry and doesn't know where to start. Feel free to use it and alter it as you see fit!
Dear (name of CEO),
My name is (name) and I'm an entrepreneur based in (city) with (n) years of experience crafting software products for (Google/Facebook/Apple/Amazon/Microsoft).
As someone with the gift of an analytical mind that leaves nothing unexamined, I believe I am uniquely positioned to quickly get up to speed with the domain knowledge intrinsic to a given field that would take normal people years to acquire. I have hence been interested in creating a business that solves some of the unique problems that (industry) faces. I was wondering if you had a few minutes to answer some questions so that I can find out what these problems actually are?
Firstly, I'm interested in the business processes in your day-to-day work that have the potential to be replaced with a CRUD application. Do you use an Excel spreadsheet for any of your operating procedures or business intelligence? Do you think there is scope for migrating some of those in-house systems to a software-as-a-service platform so that you can focus on your business' competitive advantages?
Secondly, I am a big proponent of distributed ledger technology as an alternative to single-point-of-failure classical databases in this increasingly more trustless society. Would you consider replacing part of your data storage, inventory tracking or other business operations with a custom-tailored blockchain-based solution that leverages smart contracts to ensure a more robust experience for all stakeholders?
Finally, do you think running your organisation could be made easier with a bespoke shared economy service that empowers workers to flexible time and lowers your human resources overhead while allowing you to tap into an immensely larger pool of workforce? This is an innovation that has successfully added value to taxis, hotels and food delivery and I firmly believe that there is a unique proposition in applying it to (industry).
I look forward to hearing from you.
Sent from my (device)
Yes, this is satire. But if you remove the over-the-top buzzword soup, the messiah complex and flavour-of-the-month technology, it really doesn't seem like there's much a person without any connections or experience in an industry can do besides cold-emailing people and asking them "what do you use Excel for?"
Abstract: I examine inflation-adjusted historical returns of the S&P 500 since the 1870s with and without dividends and backtest a couple of famous investment strategies for retirement. I also deploy some personal/philosophical arguments against the whole live-frugally-and-then-live-frugally-off-of-investments idea.
Disclaimer: I'm not (any more) a finance industry professional and I'm not trying to sell you investment advice. Please consult with somebody qualified or somebody who has your best interests at heart before taking any action based on what some guy said on the Internet.
The code I used to produce most of the following plots and process data is in an IPython notebook on my GitHub.
Early retirement is simple, right? Just live frugally, stop drinking Starbucks lattes, save a large fraction of your paycheck, invest it into a mixture of stocks and bonds and you, too, will be on the road towards a life of work-free luxury and idleness driven by compound interest!
What if there's a stock market crash just before I retire, you ask? The personal finance gurus will calm you down by saying that it's fine and the magic of altering your bond position based on your age as well as dollar cost averaging, together with the fact that the stock market returns 7% on average, will save you.
As sweet as that would be, there is something off about this sort of advice. Are you saying that I really can consistently make life-changing amounts of money without doing any work? This advice also handwaves around the downside risks of investing into the stock market, including the volatility of returns.
I wanted to simulate the investment strategies proposed by personal finance and early retirement folks and actually quantify whether putting my "nest egg" into the stock market is worth it.
This piece of writing was mostly inspired by NY Times' "In Investing, It's When You Start And When You Finish" that shows a harrowing heatmap of inflation-adjusted returns based on the time an investment was made and withdrawn, originally created by Crestmont Research. They maintain this heatmap for every year here.
This post is in two parts: in the first one, I will backtest a few strategies in order to determine what sort of returns and risks at what timescales one should expect. In the second one, I will try to explain why I personally don't feel like investing my money into the public stock market is a good idea.
The data I used here is the S&P 500 index. and I'm assuming one can invest into the index directly. This is not strictly true, but index tracker funds (like Vanguard's VOO ETF) nowadays are pretty good and pretty cheap.
A friend pointed me to a paper that has an interesting argument: using the US equity markets for financial research has an implicit survivorship bias in it. Someone in the 1870s had multiple countries' markets to choose from and had no way of knowing that it was the US the would later become a global superpower, large amounts of equity gains owing to that.
As a first step, I downloaded Robert Shiller's data that he used in his book, "Irrational Exuberance", and then used it to create an inflation-adjusted total return index: essentially, the evolution of the purchasing power of our portfolio that also assumes we reinvest dividends we receive from the companies in the index. Since the companies in the index are large-cap "blue chip" stocks, dividends form a large part of the return.
I compared the series I got, before adjusting for inflation, with the total return index from Yahoo! Finance and they seem to closely match the Yahoo! data from the 1990s onwards.
The effect of dividends being reinvested changes the returns dramatically. Here's a comparison of the series I got with the one without dividends (and one without inflation):
The average annual return, after inflation, and assuming dividends are reinvested, is about 7.5%. Interestingly, this seems to contradict Crestmont Research's charts where the average annual pre-tax (my charts assume there are no taxes on capital gains or dividends) return starting from 1900 is about 5%.
On the other hand, the return with dividends reinvested does seem to make sense: without dividends, the annualized return is about 4.25%, which implies a dividend yield close to the actual observed values of about 4.4%.
Another observation is that the returns are not normal (their distribution has statistically significant differences in kurtosis and skewness).
First, I wanted to plot the annualized returns from investing in the S&P 500 at a given date and holding the investment for a certain number of years.
The result kind of confirms the common wisdom that the stock market is a long term investment and is fairly volatile in the short term. If one invested in the late 1990's, say, and withdrew their investment in 5 or even 10 years, they would have lost about 4% every year after inflation. Only with investment horizons of 20 years do the returns finally stabilise.
Here are the distributions of returns from investing a lump sum into the S&P 500. This time they were taken from 10000 simulations of paths a given portfolio would follow (by randomly sampling monthly returns from the empirical returns' distribution). I also plotted the inflation-adjusted returns from holding cash (since it depreciates with inflation) for comparison.
What can be seen from this is that in 20 or 30 years, it seems possible to double or quadruple one's purchasing power.
I also plotted a set of "hazard curves" from those sampled distributions. Those are the simulated probabilities of getting less than a given return depending on the investment horizon. For example, there's a 30% chance of getting a return of less than 0% after inflation (losing money) for a 1 year investment and this chance drops down to about 5% for a 20 year investment. Conversely, there's a 100% chance of getting a return of less than 300% (quadrupling the investment), but after 20 years there's a 50% chance of doing so.
DCA is basically investing the same amount of money at given intervals of time. Naturally, such an investment technique results in one purchasing more of a stock when it's "cheap" and less when it's "expensive", but "cheap" and "expensive" are relative and kind of meaningless in this case.
DCA is usually considered an alternative to lump sum investing, but for a person who is investing, say, a fraction of their paycheck every month it's basically the default option.
I did some similar simulations of dollar cost averaging over a given horizon against investing the same sum instantly.
Unsurprisingly, DCA returns less than lump sum investment in this case. This is because the uninvested cash depreciates with inflation, as well as because the average return of the stock market is positive and hence most of the cash that's invested later misses out on those gains.
DCA would do better in a declining market (since, conversely, most cash would miss out on stock market losses), but if one can consistently predict whether the market is going to rise or decline, they can probably use that skill for more than just dollar cost averaging.
In my tests, dollar cost averaging over 20 years gave a very similar distribution to investing a lump sum for 9 years. Essentially, returns of DCA follow those of investing a lump sum for a shorter period of time.
Finally, here are the "hazard curves" for dollar cost averaging.
After a year of monthly investing we'd have an almost 40% chance of losing money after inflation and even after 20 years we still have a 10% chance. After 20 years, doubling our purchasing power is still a coin toss.
What we have gleaned from this is that the long-term yearly return from the stock market is about 7% after inflation (but before taxes), assuming one invests over 20-30 years. Compounded, that maybe results in quadrupling of one's purchasing power (less if one invests a fraction monthly, and even less with dividend and capital gains taxes).
While doubling or trebling one's purchasing power definitely sounds impressive (especially whilst doing only a few hours of work a year!), it doesn't really feel big if you look into it. Let's say you're about to retire and have saved up $1 million (adjusted for inflation) that you weren't investing. If you were putting a fraction of that money monthly into the stock market instead you would have had $2-3 million, say. But you can live as comfortably off of the interest on $1 million as you would on $2-3 million.
And on the contrary, if you have only saved $100k, dollar-cost averaging would have yielded you $300k instead, the interest on both amounts (and in retirement it has to be risk-free or almost-risk free) being fairly small.
One could argue that every little bit helps, but what I'm saying here is that the utility of wealth is non-linear. It's kind of sigmoidal, in a way. I like this graph from A Smart Bear:
source: A Smart Bear
As long as one has enough money to get up that "utility cliff" beyond which they can live off of their investments in retirement, it doesn't matter how much is it. Conversely, saving by investing into the stock market is worth it only if one is very sure that that's the thing that will get them over the line.
This possible climb up the cliff comes at a cost of locking in one's capital for a large amount of time (as short-term volatility in the stock market makes it infeasible to invest only for a few years). This lock-in leaves one completely inflexible in terms of pursuing other opportunities.
One's basically treating the stock market as some sort of a very long-term bond where they put the money in at one end and it comes out on the other side, slightly inflated. There was also an implicit assumption in all these simulations that the future follows the same pattern as the past.
Returns only become consistent after 30 years with dollar cost averaging. Someone who started investing a fraction of their savings into the general stock market 30 years ago would have gotten a 5-7% annualized return. Could they have predicted this? Probably. But could they have predicted the rise of the Web, the smartphones, the dotcom boom and crash? Probably not.
I'm not saying that whatever extra money one has should be invested into Bitcoin, a friend's startup or something else. Money can also be used to buy time off (to get better acquainted with some new development or technology) or education. Is using it to buy chunks of large corporations really the best we can do?
I also like the idea of "barbell investing", coined by Nassim Nicholas Taleb: someone should have two classes of investments. The first one is low-risk and low-return, like bonds or even cash. The second one is "moonshots", aggressive high-risk, low-downside, high-upside investments. Things like the stock market are considered to be neither here nor there, mediocre-return investments that might bear some large hidden downside risks.
There's an argument that one should still save up excessive amounts of money (as investments or just cash) whilst living extremely frugally so that after several years of hard work they "never have to work again" and can retire, doing what they really would have loved to do this whole time.
One of Paul Graham's essays kind of sums up what I think about it:
Conversely, the extreme version of the two-job route is dangerous because it teaches you so little about what you like. If you work hard at being a bond trader for ten years, thinking that you'll quit and write novels when you have enough money, what happens when you quit and then discover that you don't actually like writing novels?
Here I am, young and retired. What do I do next? Anything? How do I know what I like? Do I have any contacts that I can rely upon to help me do that "anything"? I don't feel that toiling away somewhere, being bored for a couple of decades, so that I can then quit and be bored anyway (since I hadn't learned what makes me tick), is a useful life strategy.
What about all those people who did become rich investing into the stock market? Warren Buffett is one of them, probably one of the most famous investors in the world. But he made his first couple of million (in 2018 dollars) working for Benjamin Graham, in salary and bonuses. In essence, if he wanted to, he could have retired right there and then.
Only then did he proceed to increase his wealth by investing (first running an investment partnership and so working with the partnership's money and presumably charging a performance fee, then through Berkshire Hathaway). None of these methods are available to someone with a personal investment account.
Essentially, I think that the stock market is a wealth preservation, not a wealth generation engine. Publicly-listed companies are large and stable, paying consistent and healthy dividends with the whole investment yielding a solid, inflation-beating return.
But for me? I think it's important to stay flexible and keep my options open. If someone offers me an opportunity somewhere, I don't want to say "Sorry, I have a mortgage and the rest of my money is invested in healthy companies with solid, inflation-beating returns that I can't currently sell because it's in drawdown and would you look at the tax advantages". I want to be able to say "Sure, let me give a month's notice to my landlord. Where are we going?"
All of humanity's problems stem from man's inability to sit quietly in a room alone.
All too often, in online and offline discourse, when I (or I see someone else) voice a concern about some phenomenon, the argument gets shot down with something like "Your problems are first-world problems, there are people who have it (or historically had it) much worse than you" or "Well, it could always be worse. What if you didn't have (a job/a car/food/money/a romantic partner)?"
In a way, it feels like a special case of whataboutism ("Yes, X did a bad thing, but Y also did a bad thing, so how about we discuss that instead"). To myself, I used to call it "the African children fallacy" and sure, it's kind of insensitive, but I thought that it nicely references a well-known form of it ("how dare you complain about this when there are children starving in Africa?").
Recently, I started digging into it further and learned that it's called "the fallacy of relative privation" or the "not as bad as" fallacy (RationalWiki). In this essay, I want to investigate why I don't like it being used, as well as possible reasons for it getting brought up.
In a recent Hacker News discussion on "The Workplace Is Killing People and Nobody Cares", a Stanford Business School article on the harms brought by the modern work culture, this argument was deployed fairly widely: no matter what its issues are, the modern office environment (with comfortable chairs, air conditioning and mostly interesting work) is better than the life of a medieval farmer or an industrial factory worker, so we should appreciate it.
When I published one of my earlier essays, one of the points in which was that everybody commuting to work on a 9 to 5 schedule created undue strain on all sorts of infrastructure, I got a few similar responses, too ("well, try working in a Starbucks instead of a 9-5 job and see how you like it" or words to that extent).
Thing is, all these points are valid. I wouldn't want to swap my lifestyle with that of a medieval farmer, despite that by some metrics their life might have been better than mine, or live without electricity or potable water, or even work at a coffee shop.
But that doesn't imply that I want my life to stay exactly how it is. No matter whether there are people out there whose lives are better off or worse off than mine, I always want to improve my circumstances somehow and I think it's worth contemplating how things could be made better, all the time.
In the case of work, work cultures and workplace environments, as much as I do agree office workers have it pretty good, I don't think people should treat the ability to sell most of one's waking hours to someone else as the best humanity can do. It's in fact kind of elitist to suggest that our way of life is the best one and pity those who aren't striving towards it.
In its strong form, the "not as bad as" fallacy implies that nobody can improve their lives until they have made sure everybody else is going to be better off. This kind of serves as a counterpoint to Pareto improvements, where at least one individual ends up better off without making anybody worse off.
I think, partially, using it stems from the will of the speaker to rationalise what's happening to them and why they don't want to change their own situation and examine their own circumstances. It's easy to continue doing what you're doing and not taking any risks if you've seen (or imagined) how bad it can get.
As a more extreme form of this argument, it might even be an implicit desire to not see anyone in a group become better than the group, kind of an extension of a crab mentality. A villager could be told that, sure, life in the village is tough, but the neighbouring villages have it worse, so why leave? Especially if he does make it big somewhere else, comes back and makes us all look like fools.
But, more dangerously, it can also be used as a manipulation tactic by someone who affects someone else's life and wants them to come to terms with that. Consider a boss that doesn't want to give you a raise ("well, Jimmy has worked here for a decade and never asked me for one!"). Even darker, imagine a victim of domestic abuse getting told that the problems they are facing are first-world problems and at least they still have a roof over their head. Or indeed the victim telling this to themselves as a way of self-gaslighting.
Taken to its extreme, this argument invalidates any sort of technological advancement that's attempted before every country on Earth has exactly the same quality of life. Should space exploration be (or have been) postponed until all nations have achieved Western quality of life? Or do we expect innovation in one country, no matter which side of the globe it's on, to be eventually spread around the world?
I think Stoicism is a great philosophy and a way of life and I've been trying to use it in my life too. One of Stoicism's core teachings is that the best way to be happy is wanting things that one already has and valuing them. Negative visualisation is one of the tools for that: imagining how things could be worse, partially to appreciate them more, partially to plan for the case they do become worse. When used like that, Stoicism leads one to the revelation that they could be happy here and now, without relying on anything outside of their control.
Hence, the "not as bad as" argument could also be used as a way of negative visualisation.
But a large amounts of Stoics whose writings have reached us were rich and famous. Seneca was a playwright and a statesman. Marcus Aurelius was an emperor. I have long tried to reconcile the fact that Stoicism seems to stop us from wanting anything with the fact that a large part of Stoics were of high statures.
Given that for Stoic writings to reach us, they had to have been famous in some way already, it's possible that they started using this philosophy as a way to keep the positions that they had achieved and stay where they were. However, it also could be argued that their beliefs empowered them to do what they felt was right without seeking external validation. That the recognition of their work in terms of money, fame or prestige happened as a side effect, something they didn't care about.
One of my favourite pieces of writing I reread quite often is David Heinemeier Hansson's "The Day I Became A Millionaire". Here's what I think is the best quote from it:
Barring any grand calamity, I could afford to fall off the puffy pink cloud of cash, and I’d land where I started. Back in that small 450 sq feet apartment in Copenhagen. My interests and curiosity intact. My passions as fit as ever. I traveled across a broad swath of the first world spectrum of wealth, and both ends were not only livable, but enjoyable. That was a revelation.
Note how DHH caveats this with "first world spectrum of wealth": he also credits the privileges we have, in his case, the Danish social security system, with his success.
I view Stoicism and ability to appreciate what I already have as a springboard to continuous (and continued) improvement of things within my control. It's the ability to take risks knowing that wherever you land, your life will still be pretty good. So in that respect, the "not as bad as" argument turns into "won't ever be as bad as", changing apathy into an empowering limited-downside proposition.
While appreciating privileges that we have is a good tactic for personal happiness, I also believe that the best way to respect those privileges is to use them and do things that one wouldn't have been able to without it. Otherwise, we're essentially squandering them.
And it's not like one's success helps just that person. Joanne Rowling wrote the first few chapters of Harry Potter whilst on benefits, another first world privilege. A couple of decades later, these series of books have sold in excess of 500 million of copies worldwide and spanned a film franchise that has grossed a few billion dollars. Notwithstanding the joy that the Harry Potter series has brought to the people all across the world, the tax revenue from that might well make the UK's welfare system one of the best-performing VC funds in the world.
Sure, all of humanity's problems might stem from a person's inability to sit quietly in a room alone, but so does all the progress.
Once upon a time I bought a car. I drove it straight out of the dealership and parked it on my driveway. This is a thought experiment, as youth in the UK can't afford neither a car nor a driveway and I can't drive, but bear with me.
I bought a car and I drove it around for a few months or so and life was great. It did everything I wanted it to do, it never stalled and never broke down. One day, I got an e-mail from the dealership saying that they'd need to update my car. Sure, I thought, and drove there to get it "updated". They didn't let me look at what they were doing with the car, saying that they were performing some simple maintenance. Finally, I got my car back, without seeing any visible changes, and drove it back home.
This happened a few more times over the next several months. I'd get an e-mail from the dealer, drive the car back to them, have a cup of coffee or three while they were working, and then get the car back. Sometimes I'd get it back damaged somehow, with a massive dent on the side, and the dealership staff would just shrug and say that those were the manufacturer's instructions. Then a few days later, I'd get summoned again and after another update cycle the dent would be gone.
At some point, I stopped bothering and after a few missed calls from the dealership my car stopped working completely. I phoned the dealership again and sure, they said that the car wouldn't work until another update. Great. I had the car towed to the dealership and drove back without any issues.
One night I got woken up by a weird noise outside my house. I looked out the window and saw that some people in dark overalls were around my car, doing something to it. I ran out, threatening to call the police. They laughed and produced IDs from the dealership, telling me that since people were frustrated with having to update their cars so often, they'd do it for them in order to bother them less.
I sighed and went back to sleep. This continued for quite some time, with the mechanics working on my car every week or so. I'd invite them for tea and they would refuse, quoting terms of service and all that sort of thing.
One day I woke up to a car covered in ads that seemed to be related to what I was browsing last night. There wasn't anything controversial, thankfully, but it was still a bit unsettling. The dealership support staff said it was to offer me products relevant to my interests. I asked if I could take them down and got told that it was a part of the whole offering and the vehicle wouldn't work without them. So I had to drive to work surrounded by more pictures of the Trivago woman that I was comfortable with.
After a year or so, the manufacturer had innovated some more. When I got into the car and turned the ignition key, a bunch of mechanics appeared seemingly out of nowhere, and picked the car up, ready to drag it as per my instructions. Turns out, the night before they had removed the engine and all the useful parts from the vehicle, turning it into a "thin client". It was supposed to make sure that when there was an issue with the car, they could debug it centrally and not bother all their customers.
Finally, one morning I got into the car and nothing happened. Turns out, the manufacturer was acquired by a larger company last night and their service got shut down. I sat at the wheel, dreading being late for work again, and suddenly woke up.
Once upon a time I opened a new tab in Firefox on my Android phone to find out that besides a list of my most visited pages to choose from, there also was a list of things "suggested by Pocket". What the hell was Pocket, why was it suggesting me things and, more importantly, how the hell did it get into my Firefox?
I remember when pushing code to the user's device was a big deal. You'd go to the vendor's website, download an executable, launch it, go through an InstallShield (or a NullSoft) install wizard if you were lucky and only then you would get to enjoy the new software. You'd go through the changelogs and get excited about the bugfixes or new features. And if you weren't excited, you wouldn't install the new version at all.
I remember when I went through my Linux phase and was really loving package managers. It was a breath of fresh air back then, a single
apt-get upgrade updating all my software at once. And then Android and Apple smartphones came around and they had exactly the same idea of a centralized software repository. How cool was that?
I'm not sure when mobile devices started installing updates by default. I think around 2014 my Android phone would still meekly ask to update all apps and that was an opportunity for me to reestablish my power over my device and go through all the things I wasn't using anymore and delete them. In 2016, when I got a new phone, the default setting changed and I would just wake up to my device stating, "Tinder has been updated. Deal with it".
And it's been the case on the desktop too. I realised that Firefox and Chrome hadn't been pestering me about updates for quite a while now and, sure, they've been updating themselves. I like Mr Robot, but I like it in my media player, not in my browser.
It's not even about automatic updates. I could disable them, sure, but I would quickly fall behind the curve, with services that I'm accessing stopping supporting my client software. In fact, it's not even about browsers. I'm pretty sure I wouldn't be able to use Skype 4 (the last decent version), that is, if I could find where to download it. As another example, I recently launched OpenIV, a GTA modding tool, at which point it told me "There's a new version available. I won't start until you update". Uuh, excuse me? Sure, I could find a way around this, but still, it's not pleasant being told that what's essentially a glorified WinRAR that was fine the night before can't run without me updating it.
(as an aside, WinRAR now seems to be monetized by having ads on its "please buy WinRAR" dialog window.)
However, that leaves users at the mercy of the vendor. What used to be code running on their own hardware is now code running on the vendor's hardware or code that the vendor tells their hardware to run. So when they end up in a place with no Internet connection or the vendor goes out of business, the service won't work at all instead of working poorly.
By the way, here's an idea on how to come up with new business ideas. Look at the most popular Google services and have a quick think about how you would write a replacement for them. When they inevitably get sunsetted, do so and reap kudos. For example, I'm currently writing a browser addon that replaces the "View Image" button from Google Image search results.
In fact, it's not just an issue with applications. Once upon a time in early 2017, I came home from work to find my laptop, that had been on standby, decided to turn itself on and install a Windows 10 update. The way I found that out was because the login screen had changed and it was using a different time format. And then things became even weirder as I realised that all the shortcuts on my desktop and in the Start Menu were missing. In fact, it was almost as if someone broke into my house and reimaged my whole hard drive. Strangely enough, all the software and the data was still there, tucked away in
C:\Program Files and its friends, it's just that Windows wasn't aware of it. Thankfully, running a System Restore worked and the next update didn't have these problems, but since then I stopped allowing automatic updates. Except there's no way I can figure out what a given update does anyway.
I'm really scared of my phone right now. Here it is, lying by my side, and I've no idea what's going on in its mind and what sort of information it's transferring and to where. When I was a kid and got gifted my father's old Nokia 6600, I was excited about having a fully fledged computer in my pocket, something with a real multitasking operating system that I could easily write software for. Now, I'm no longer so sure.
Imagine if we could turn this:
The first picture is a graph of how many people enter the London Underground network every minute on a weekday. The second graph is for the weekend, except slightly altered: I normalized it so that both graphs integrate to the same value. In other words, the same amount of people go through the network in the second graph as in the first graph.
Would you rather interact with the former or the latter usage pattern?
The data geek in me is fascinated at the fact that there are clear peaks in utilization at about 8:15 (this is the graph of entrances, remember) and, in the evening, at 17:10, 17:40 and 18:10. I'll probably play with this data further, since the dataset I used (an anonymized 5% sample of journeys taken on the TfL network one week in 2009) has some more cool things in it.
The Holden Caulfield in me is infuriated at the fact that these peaks exist.
It's alarming how often society seems to hinge on people being in the same place at the same time, doing the same things. The drawbacks of this are immense: infrastructure has to be overprovisioned for any bursty load pattern and being inside of a bursty load pattern results in higher waiting times and isn't a pleasant experience for everyone involved. Hence it's important to investigate why this happens and whether this is always required.
Have you heard of TV pickups? Whenever a popular TV programme goes on a commercial break or ends, millions of people across the UK do the same things at the same time: they turn kettles on, open refrigerator doors, flush their toilets and so on. This causes a noticeable surge in utilization of, say, electric grids and the sewage system. As a result, service providers have to provision for it by trying to predict demand. This isn't just an academic exercise: in the case of electric energy, generators can't be brought online instantly and energy can't be stored cheaply.
In the case of the Underground network, there are times on some lines where trains arrive more frequently than every two minutes (pretty much as often as they can, given that the trains have to maintain a safe distance between each other and spend some time on the platform) and yet they still are packed between 8am and 9am. Any incident, however small, like someone holding up the doors, can result in a knock-on effect, delaying the whole line massively.
Why are people doing this to themselves?
The weekend was a great invention (although Henry Ford's reason for giving his employees more time off was that they'd have nothing to do and hence start buying his own, and other businesses', goods). But does the weekend really have to happen at the same time for all people?
Some of the phenomena governing people's schedules are natural. It does get dark at night and people do need light. It gets cold in the winter and people need heating. But the Earth does not care whether it's the weekday or the weekend, a Wednesday or a Saturday. And yet somehow the society has decreed that Wednesday is a serious business day and any adult roaming the streets during daytime on that day might get weird stares.
Expanding on this, do working hours have to happen at the same time either? People naturally need rest, but what they don't naturally need is to be told when exactly they can work and rest. And in some types of work, like knowledge work, being told when to work is not necessary and even can be harmful.
In professional services, in most cases, the client doesn't care when the service is being performed. The client wants a tax return to be prepared: they don't want the tax return to only be prepared between 9 and 5. The client wants their investments to be managed: the investments don't need to only be managed between 9 and 5. And so on. Fixed work hours make no sense since it's not time the client is buying, it's the result. Knowledge work isn't predicated on people having to do it at the same time or even at a given time.
The fact that everybody has to work fixed hours hails from the Industrial age assembly line thinking (in fact, the term "line manager" is still used in the UK to refer to one's boss). If one part of the assembly line is missing, the assembly line doesn't work. Hence the management has to make sure that all parts of the assembly line have finished their sandwiches and are in place for when their shift starts. The whole shift also has to get their days off synchronously, as it can't function at all after a critical mass of people has taken the day off.
This is in no way an argument for longer working hours. If a person has exhausted their working capacity for the day, what's the point of holding them in the office until a given hour unless they're in a role that requires that? Some people work better when they have a set goal and some time to achieve it, to be used at their discretion. Some people work in bursts, where the output of one day can overshadow the rest of the week. Mandating fixed hours for knowledge workers means they aren't as efficient as they can be for their employer and further suffer from the utilization peaks that they themselves cause.
Do we still need offices? Some criticize working from home as a way for employees to slack off. But if you think your people won't work unless they're watched, maybe you're hiring the wrong people. A loss of productivity from not having someone standing over their shoulder is offset by the gain in productivity from not having someone standing over their shoulder and not working in a distracting open office environment.
A benefit of offices is that they encourage communication and sharing of ideas. It's much easier to walk up to someone and ask them something, and information travels around quicker and more naturally.
On the other hand, imagine if you were a medieval scholar. They would usually work alone, with all communication with their peers done over long-form letters. Communication used to be asynchronous and there was no way the letter would be delivered as soon as it was fired off, hence there was no expectation of getting a reply in the same hour or even within the same day.
Nowadays, people are expected to respond to messages instantly, which means they have less and less uninterrupted time in which they can't be distracted.
Would you rather have a 1-hour chunk of time to do work in or 6 chunks of 10 minutes, interrupted by random phone calls, instant messenger pings and people walking up to you? The former option is much, much better if you want to do any deep work. Productivity is highly non-linear and 10 minutes of work result in better outcomes when they come after some time to ramp up. Even the anticipation that you can be interrupted can distract you and prevent you from getting into a state of flow.
Perhaps there's no need for people in the workplace to expect others to be able to instantly respond to them. In fact, slower, asynchronous communication can lead to more robust institutional memory inside of an organisation. Instead of the easy fix of tapping a colleague on the shoulder to get an answer, the worker might instead devise a solution for an issue themselves or figure it out while typing up an email, adding to the documentation and making sure fewer people have that question in the future.
Do all meetings have to happen at the same place or at the same time? Some of them do: sometimes there's no replacement for getting all stakeholders in the same room in order to come to a decision. But meetings are also a great way to waste company money, setting thousands of dollars on fire by the simple act of blocking out one hour of several people's time.
What is now a synchronous meeting (together with the flow breakage than that brings: I found that I'm more productive in a given hour if I know I don't have to go anywhere in the next hour even though the time I'm spending is the same) could be an asynchronous e-mail chain or a set of comments on the intranet that people can get to at their discretion.
There's something mesmerising about being able to watch live coverage of an event. Instant notifications of a new development are a way to gratify yourself, feel like you've done something, get a small dopamine rush from getting another nugget of information. But in reality, not much has changed and this development will likely be insignificant in the end.
In this age, people have no time to think about their reaction: everything is knee-jerk, synchronous and instantaneous. An incident happens. Minutes later, we find out there is a suspect. Minutes later, there's a witch hunt across social media for the suspect and their family. Days later, the suspect is acquitted and there's another suspect. Information, not necessarily valuable or true, nowadays travels so fast that things can easily get out of control and anyone with Internet access can join in the madness.
There are a few billion times more people than you and your brain can't process inputs from them all in real time. Hence people have to operate with abstractions. Instead of constantly receiving a stream of data that interrupts your life and ultimately doesn't add anything to it, why not go to a different abstraction level and lower the sampling rate, instead reading a weekly newsletter?
If you had an investment portfolio, would you act based on looking at its performance every hour or every day? Or would you instead be aware that all the noise from the daily developments will probably cancel itself out and turn into a clearer picture of what's happened?
A friend of mine works in a role where she needs to interact with offices in other countries that don't maintain UK bank holidays. What her employer does is increase her holiday allowance instead, making bank holidays a normal working day. I think this is amazing. The time when most people are away on holiday is the best time to get some work done in the office and the time when most people are in the office is the best time to go shopping, visit doctors, go to a museum and do all other sorts of other life admin things.
From a cultural point of view, public holidays are amazing. From a logistical point of view, they're a nightmare. If everybody is having a holiday, nobody is, and the fact that everyone is observing the holiday at the same time yet again creates usage peaks in all sorts of places.
For example, synchronous buying of presents means that retailers have to overstock their wares in run-up to major holidays, say, Christmas, and, worse even, have to offload all the Baylis and Harding soap sets at fire sale prices starting at about dinnertime on the 24th December. Hilariously, the best time to shop for Christmas presents is in January.
And most holidays are taken around these times too. People in the UK get fined and can even get prosecuted for taking their children on holiday during term time. The fine is usually less than the difference in price for airline tickets and accommodation between taking a holiday during term time and outside of term time, but that price difference is just a consequence of the difference in demand between those times. There are still planes in January, but they're... emptier. And airports aren't such an unpleasant experience.
In any case, most parents are now coerced to take holidays only outside term time, which has a knock-on effect on flight/accommodation usage and prices.
I honestly don't know how to solve most of these problems. Maybe with the rise of remote work and teleconferencing this will naturally go away, moving us to a future where nobody can have a case of the Mondays any more. Some companies are embracing parts of being asynchronous already, like Basecamp (ex-37 Signals) who list the benefits of remote work and fewer meetings in REWORK.
It's more difficult on the social side. I dream of a relationship where we agree to celebrate all holidays (Christmas, Easter, Valentine's etc.) a few days later to take advantage of the trough in the demand that comes after the peak. In addition, to be efficient, education indeed has to be synchronous: one teacher educates multiple children and any of them skipping material will result in them having to catch up, delaying the whole year. I had a chat about this with a friend once: what if education were much more granular, with children (or their parents) being able to pick and choose when their child takes a given class? Staggered school shifts, perhaps?