Energy

Sampo Pankki...

I previously blogged about my experience with Sampo Pankki and how they actively sought me out to sell me stuff and to manage the customer relationship. What followed from that meeting was absolutely hilarious...

The only thing I was interested in was to change my former pankkikortti/credit card which cost something to a free debit/credit card that they were offering for young customers. Well, the contract stuff didn't go as planned as they forgot to have me actually sign the contracts that were needed... So they send them to me and I return them signed. Then I go on vacation and they call me to tell me that they received the contracts. I'm sailing for a week and return just in time to get another phone call from them telling me that I need to send my old card back because they already sent the new one. Which is nice, especially since I haven't really been at home. I promise to send back the old one.

I look at the new card, which the bank decided to give to me in a horrible black color with tiny sprinkles of glitter on it. Yay. They I tell them that the basic layout would've sufficed, especially as I hadn't requested any special theme for the card. And I get told that unfortunately all credit cards will now have some theme. But wait! I ordered a debit/credit card (my exact words were that they should create an "identical" card under the new contract with identical credit limits, debit features, etc.). Apparently they decided to only give me a credit card. And what more, they in fact also altered the terms of the credit by themselves to require repayment of 100% of the balance on the credit card each month (I always pay the credit cards back monthly, but for the sake of security, I like to keep the minimum bill at 10% if for some odd reason some month I just absolutely have to use up ~all of the credit).

At this point my patience runs out. Over the years I've put up with all sorts of shit from Sampo Pankki. Their online bank is broken more often than it isn't. Their card systems are broken so their cards routinely don't get accepted in restaurants. The fees that they charge are significantly higher than their competitors charge. But I've still stayed with them out of some twisted sense of loyalty. But this was it, my patience with Sampo wore out. Fortunately the one thing they did manage to actually get right was the termination of the relevant contracts.

Amusingly enough I did call their competitor with whom I'm also a customer and told the nice lady there what had happened and how it would be really cool if they'd set me up with a similar setup as I had in Sampo as I would like to move my daily bank activities to their bank. And that I'm in a bit of a hurry as I cut my Sampo cards in half and I'm leaving shortly to NYC for a trip and would like to actually have something to pay with on that trip. And lo and behold, this competitor actually delivered everything brilliantly within a couple of work days. Amazing.

So, to sum up the key lessons from this experience: if you're living in Finland and thinking about which bank to go to, stay the hell away from Sampo Pankki. They absolutely, positively suck at more or less everything they do.

Criteria

I again stumbled upon some Finnish blogs (yes, I know, I should refrain from reading these as they just result in me digging blood from my own nose...) and lo and behold the topic of the day was about the criteria that people, in this case women, have for selecting their partners. The topic is naturally as old as humanity and one of the more common discussions online. That said, I got around to thinking about it again and came up with the following angle.

My approach is that people typically have various dimensions to their lives. In the western hemisphere and especially in the regions plagued by the protestant work ethic one of the core dimensions is work. Another could be social life, friends, and the related stuff. A third could be continuous learning, sparring with ideas, and the pursuit of intellectual satisfaction. Then we could have physical well being and so on. I haven't spent very long with the taxonomy and I bet that someone could devise a more elaborate one and ensure that the categories are as orthogonal as possible to minimize overlapping. But for the sake of conversation, let's say that we have these categories to our lives. Finally, one of these categories is naturally that which contains your romantic life, your partner, etc.

The amount of time people spend thinking about this category seems to be disproportionately large compared to the fact that there are more things to life than selecting a partner. And people can be satisfied despite being single. For the sake of discussion again, let's say that for each category there's a certain threshold level that the person needs to achieve in order to be content with that aspect of their life. You can, to an extent, manually adjust the threshold level, but in some cases there are certain boundaries within which you must work. For instance, I couldn't say that currently I'd be satisfied in my professional life if I'd be cleaning streets; I'm currently way more competitive and want to move upwards and achieve things. So because of my character and nature, I can't really set the threshold level lower than a certain boundary.

But regardless, we now have categories and threshold levels. The name of the game is now to live a fulfilling life and pursue happiness. My hypothesis is that in order to achieve that, you should initially ensure that every category achieves the threshold level. I might be very successful at work, but if my social life is significantly below the threshold level, I would still be unhappy. Maximizing a single category is thus a very sub-optimal strategy and it's bound to fail in the long run.

Thus the amount of effort that people seem to allocate for their love life is very disproportionate. And defining hard criteria to define who you can and cannot date is not only a somewhat bad idea, but also eventually bound to backfire as you're going to undoubtedly set the threshold levels too high and cause yourself to be very unhappy. The dynamic here is that it's a multifold game: first you have to find the set of people who fill your criteria. Then you have to have individual games with each of the people to see if they're interested in you. And this is followed by the typical dating games and so on. If you have set your threshold levels high, then naturally this will cause the set of potentially interesting people to decrease drastically. This then also has the added fun factor involved in the fact that if you are very selective, then typically the other person can also be very selective. Are you special enough to pass their criteria lists? If not, then it's game over for you unless you split and re-evaluate your own criteria.

Then there's the aspect of the criteria lists in general. Apparently very often a certain group of women wants their potential partners to be good looking, well educated and smart, wealthy, successful, and so on. What's the point in that? Now that we're striving for gender equality, my understanding is that women should be able to finance their own lives and thus they wouldn't have to be dependent on men. These types of lists still sound to me as if certain women still see the world as a place where the name of the game is that they trade certain traits that they possess for an affluent and powerful spouse who will then support their lives. Hmm... Well educated? What does this matter? If your partner is incredibly well educated in a certain area, let's say in some specific area of string theory, chances of you actually understanding anything about it are very slim. So you most likely won't have interesting discussions about that aspect of their life with them. Unless of course you're also into that specific thing and rank in the top 10 researchers on the subject. This of course was a provocative example, but I guess the underlying point is that specialization of your spouse in a certain academic field is very much irrelevant in regards to your love life. Then there's of course the whole discussion regarding whether or not the level of education can be used as a proxy for intelligence.

So, my take on the criteria lists is that there is essentially one criteria for me regarding whether or not I want to spend my life with someone. And that criteria is essentially whether or not I love them. If I don't, then that's that. And if I do, that's simple enough again. The whole process of dating is merely to check out the compatibility, and there's no need to analyze it deeper with lists of criteria. If it clicks, it clicks. Having shallow lists of criteria merely makes your job harder as you might in fact potentially also miss interesting people who could've been the perfect match for you despite the fact that they might miss some mundane bit of criteria by being e.g. 169 centimeters tall instead of being over 170 centimeters.

And once you do find someone who you love and can share your life with, then I guess the natural thing to do is spend the leftover time to work on the other areas of your life which still need working. Because if you don't, then eventually you're anyway going to end up with an unhappy life. Or that's my take on the subject, anyway.

Food

These days organic foods and whatnots seem to be all the rage. And as usual, I can't really understand what the fuss is about. As a disclaimer, I have no firm understanding of the subject, but if I understood correctly, the core arguments from the proponents of organic food revolve around the notions that 1) organic food is healthier for humans and 2) organic food is more environmentally friendly. The first point seems to relate to the fact that with no pesticides, growth hormones, and other more or less interesting things the resulting food, be it vegetables or meat, is more natural and thus humans don't get exposed to all the unknown nasties in the non-organic stuff that are stuffed into plants and animals to get them to grow faster. The second point relates to the first in the sense that due to the limited use of fertilizers and other stuff, we don't pollute the ground as much.

I guess there may be some truth in both points. One question that springs to mind immediately concerns the efficient agriculture that we have going these days: can we organically produce enough food to ensure that everyone can eat and survive? Some argue that organic food is less efficient to grow and plowing down the rainforest is the only way to go organic on a global scale. To be honest, I can't judge whether this is true or not, but it does sound plausible. Secondly, the health aspect is something that I again find myself wondering about. My understanding is that due to the organic philosophy, farms that grow organic food have much stricter control mechanisms for ensuring quality. Which is good. But building on that, I would argue that non-organic food should perhaps be put through tighter quality requirements as well and mishandling of food should be punished more strictly. Perhaps this would drive the prices up, but then we would have higher quality food. As part of the stricter controls, perhaps even more emphasis should be placed on researching the stuff that goes into the foods.

Personally I'm not too concerned with the extra stuff that goes into foods as long as blatant mishandling and high quality are ensured in the production process. The thinking behind my view is essentially that if you look at the organic crowd, they're arguing for a return to the basics: no extra stuff in the food. But if you want to go back to basics, why stop there? I've recently been tuning in on some discussions about hunter-gatherers, and I guess the ultimate argument is that agriculture itself was the worst invention man has ever come up with (I believe someone attributed this comment to Jared Diamond). The idea is that since agriculture came along, we stopped acting in a way that was natural for humans, got lazy and fat and began focusing on things that seemed like good ideas, but ultimately had little to do with our health. So ultimately you should just run around gathering berries and hunting animals all day long. Not only would you then have a healthier diet but also focus on other important aspects of health, i.e. proper exercise and fitness. To be even more provocative, ever since we shifted into an agrarian lifestyle, the size of human brains has began to decrease, and the notions that IQs have risen are also meaningless since naturally people will adapt and become better at predefined tests.

I may not necessarily be that much of a hardliner in the above thinking, but it does sound reasonable. While I still may not necessarily change my eating habits too much, what I will do is think about the hunger-gatherer aspect in the context of exercise. That topic may actually warrant another entry after I think about it a bit more.

Jobs and ethics

I was recently approached by a bank who's customer I am as they wanted to have a meeting to talk about thing, mainly about selling me all types of products. The meeting itself was rather interesting, as they had supplied me with some barely 20-year-old girl to sell cards and mutual funds and whatnot. Naturally she may not have had too much clue about what she was in fact selling or how ("You appear to pay currently 40e per year for this card and 0.5e per month for this other, if you pay us 5.7e per month, you'll get both..."), but this raised some questions about the ethics of doing business...

In this specific case besides the blatant problem of attempting to overcharge (especially as a different bank has already given me everything she was offering for free...) there is a question whether or not the bank would've looked out for my interest. Naturally I'm not a big customer, so I don't get to talk to the more experienced people, but trying to sell me some obscure mutual fund which invests into other funds with a distribution of 25% to stock funds and 75% into bond funds at a time during which we have the whole Greek situation going on with an argument that the fund has made 13% since last summer is questionable (just for record, comparing with a year back, I guess the only possible way to have actually lost money would've been to invest in NOK...). When asked about this, the bank's representative didn't really appear to be too much on the map. Neither when I asked her if she actually understood about all the hidden costs associated with her product (the answer was: "But it's free, there's no fee!").

But, this still begs the question of ethics and looking out for the customer's interest. Lack of knowledge is something that I don't like at all and if you sell me something, you're in a really sticky spot if you insist on knowing something that you in fact don't. That's just dangerous and not looking out for my interest. There's of course the separate case where the seller might in fact know better but doesn't care about me. For these cases I suggest you to read about the behavior of bankers during the 1980s in Michael Lewis's Liar's Poker. Business is business, but still...

This got me also thinking a bit about myself. What do I in fact know about my line of work and is it beneficial for my employer, my customers, or the society at large? I guess the scary answer is that I don't know. I would like to think so, but I'm not entirely convinced. But I do think about it and try to understand the world a bit more and based on my studies, there are certainly many cases where standards are beneficial for the customers and society. Are they always beneficial for the company? It depends...

Oh, and a final note, the meeting with the bank did go decently well. I reduced all of my costs to zero while retaining essentially the same products. Which is nice.

Inches

Dreams

Overconsumption

“The wealthy are spending more now simply because they have more money. But their spending has led others to spend more as well, including middle-income families. If the real incomes of middle-class families have grown only slightly, how have they financed this additional consumption? In part by working longer hours, but mainly by saving less and borrowing more.”

That's borrowed from Krugman's slides, who in turn attributes that to Robert Frank. That may very well be true, judging by personal experience. I still maintain that it's ok to have variable costs with a more or less wide variance as long as you can control it, if need be, and also keep your fixed costs under tight control.

Zagat for Finland

I've recently fallen in love with one of the more useful "Web2.0" applications around here in Finland which is aptly called eat.fi. The concept is very simple and very old: rate restaurants. And as is all the rage, then there's the possibility to meta-rate. But all in all the whole setup is as simple as can be, and what more, it solves a practical problem and question for me: where should I eat today?

As a consumer I'm fairly in line with your typical Finn. I do get very annoyed very quickly if things don't go right in a restaurant, be it an improperly prepared dish or incompetent waiting staff. But I seldom take it out on the staff, preferring instead to send feedback directly to the upper echelons of the restaurant, if at all possible. In my view this cuts through the crap and takes the problem directly to the people who need to be aware of it: the upper levels of the company, perhaps even the owners. What is the point of giving feedback to a waitress who may not necessarily be too receptive towards criticism from a random customer when instead you can reflect a bit about what exactly happened and then try to offer a bit of analysis to the leadership of the company. I also don't typically attach my details to the feedback as I don't really want to appear like the type of guy who would be fishing for compensatory gifts from the company. It's enough that I've hopefully raised some points and in the future the restaurant is able to function better.

But with eat.fi, the whole eating experience has in fact gotten another dimension altogether: the social aspect. Not only do I finally have the possibility of publicly giving praise for places I like, but I can also find the people who appear to like similar places as I do and follow their ventures. And I must admit that the whole concept of meta-ratings makes sure that instead of deteriorating to a rant, I instead try to keep the feedback brief, simple, and as objective as possible. Oh, and I like points.

But yeah, long story short, I'm absolutely hooked on the system and my account is available here. If you're also a member at eat.fi, drop me a line.

Meet Ari Gold

Ages and roles and the Marine Corps

As has been the theme for this Spring, I've been thinking about what is wrong with big companies. Another aspect that came to mind is the age old dynamic between young and old people: young people think older people are complete fossils and the old people think the younger people are obnoxiously arrogant and don't respect age. But the thing is that the last couple of generations of work force are part of a very fundamental shift in technology, which can be shortly characterized as the first time in history when technology life cycles have become shorter than the working lives of people. What this in practice means that your technical skills will be significantly outdated well before you ever reach retirement.

In practice this is quite obvious if you look at technological evolution. Agricultural technology took a lot longer to become widespread than the printing press, which in turn had a longer life cycle than the steam engine, which in turn was outpaced by radio technology, and so on leading up to the niches of today's IT world. To put it blatantly, I'm twentysomething and I've already sort of fallen out of the cutting edge of technological evolution that I once was very much into. In the current world of the world wide webs, cycles are measured in years, at best, and in months at worst. So while all of the above might not necessarily be exactly accurate enough to be an academic thesis, the trend is still clear.

This in fact led me to think about how different people create value. As an analogy I started thinking about a friend of mine who plays floorball very actively and is apparently quite good at it. The situation that he is encountering is that now that he's about 30, he can no longer keep up with the young guys. So instead he has to start playing with more intelligence. I also get the impression that he also brings a lot of spirit into the team and is in fact very crucial in fostering the team spirit and acting as an "older brother". So in brief, the value add that he brings is different from the value add that the 20-year-old guy brings to the team.

Related to this, I was recently skimming over the US Marine Corp's document named MCDP 1: Warfighting. It is a very interesting read and one of the things that I think fits here nicely is the concept of different levels of war, which range from strategic to operational to tactical. In brief, the strategic level is focused on the question of how to win wars. The operational level in turn focuses on how to win campaigns, while the tactical level addresses how to win battles. So if we apply this type of approach in a very raw fashion to the floorball analogy and ages, we might get something like the following situation: the 20-year-old guy operates on the tactical level, i.e. how to win over the ball and score goals. The 30-year-old guy operates on the operational level and works on keeping the spirits up, the team functioning during the match and is ultimately looking at how to win games. Then, the coach, who I guess can be of various ages but for the sake of discussion is now 40, then operates on the strategic level and is focused on how to win the whole season.

So it's clear that the value add that each of these guys brings to the table is fundamentally different and is based on each one's intrinsic capabilities, which are also very much tied to age. The 20-year-old guy is often very self-centered and focuses on shorter time horizons (take it from someone who is still twentysomething... :). The 30-year-old is getting into the family-fostering mode, to be provocative. While the 40-year-old is slowly starting to realize that if he wants to leave behind any type of legacy, then now is the time to start doing so or else it's not going to happen. But these guys can't generally operate very efficiently on each others' levels as they don't have the capabilities for that. And there's nothing wrong with that, because everyone is still needed.

Now, how does this in any way relate to big companies? Well, in big companies it's not so different: recent graduates are very keen on technology and represent the running power of the athlete and are able to do the heavy lifting. Slightly older guys in turn have slightly more perspective and experience and while no longer representing the cutting edge of technology, they might still be able to contribute by being efficient in managing the younger guys and pointing them in the right direction while being able to support and serve their subordinates in their daily jobs. And eventually we should ideally have people who have seen how the world works, have become the statesmanlike leaders that the world needs and are still able to stand solidly enough to keep things sane (we younger guys tend to like to run very fast and if we're not careful, we often just run for the sake of running and occasionally in the wrong direction). But again, to overly simplify the situation, these roles and the types of people may have difficulty operating on the wrong levels.

The problem, then, is when this nice and neat theoretical approach doesn't work out in practice. You have the middle-aged guy who is painfully outdated technologically trying to keep up in the role that's in fact meant for the twentysomethings. Or when a recent graduate is thrown into the difficult task of making longer-term strategic decisions without the capabilities and the experience of truly understanding or appreciating the complexity and trickiness of the task at hand. And this, I argue, is one large problem in large incumbent companies. How should one solve this, then? That's a completely different question and hopefully the statesmanlike leaders are able to solve that question. Because I sure can't...

Why some people play with sharp knives...

By talking to a couple of people who have practiced Krav Maga for quite a while I heard of an interesting trend: at some point people tend to start practicing with sharp, real knives. I talked about this with other people and most of them held the view that it is incredibly stupid to do something like that as the probability of something bad happening in the form of an unintentional accident increases dramatically. However, reading a paper by Chet Richards had an interesting quote from Musashi's The Book of Five Rings, which actually sheds some light on this:

Most warriors only perform tricks … In order to understand life and death, you must actually be in a situation where the possibility of death exists ... Through constant practice, you become free of your own ideas of what and how things should work

It actually makes sense...

On gifts

The culture of gift giving is a very fascinating thing: while the fundamental ideas are good, I keep getting a strong feeling that nowadays it is dominated by selfishness and self-entitlement: people are no longer pleasantly surprised by gifts but instead they implicitly expect and demand them. Nowhere is this more evident than in weddings, where I guess traditionally the concept was to help the new couple create their new home. But times change and these days couples that are getting married often already have been living together for a while and thus the need for cutlery and coffee machines should have been satisfied. But lo and behold, these days we have interactive gift lists with detailed descriptions and specifications for what is expected and acceptable to the couple. Or if you don't find anything from the list that you want to give, don't just wing it but instead give cold hard cash...

Somehow these types of things annoy me incredibly: I give gifts if I feel like giving them. If someone is demanding something from me, I don't typically give it to them merely on the grounds of them demanding it. And when friendships and relationships are in question, demanding material is in my opinion very much questionable.

Now, another funny aspect of the dominant demand-culture is that if you actually look at only the cash flow, it's a silly cycle of people sending money between themselves. While thinking about this topic, I browsed over some blogs and comments where people were giving out all types of guidelines about how much cash they typically give if they attend the wedding and how much if they don't attend. Then there are the people who motivate the discussion by noting that they do demand gifts and money because they have given gifts and money, which just results in this cycle. Money is good as you can shuffle it back and forth, but for some odd reason these same people tend to dislike it if they have given you a gift and you give it back to them when they have a celebration.

What I typically do during Christmas, for instance, is that if A gives me chocolate (C1) and B gives me chocolate (C2), I just act as a proxy and give A the C2 chocolate and B the C1 chocolate. If I get chocolate from more people, then I just hand them out in a random fashion back to the people. That way everyone is happy and I, not liking huge amounts of chocolate, don't get stuck with any useless stuff.

At this point I guess I should just say it out loud very clearly: I do not want or expect presents. If you must give me something, please donate to some good cause and tell me about it. It's a lot more useful than filling my already small apartment with all sorts of crap that I don't need. Alternatively if you don't want to help charitable foundations and still want to give me something as a present, please call me and I'll tell what equities you can purchase and transfer under my name to complement my existing investment portfolio.

Mission statements

Zephyr Holdings aims to build and consolidate leadership positions in its chosen markets, forging profitable growth opportunities by developing strong relationships between internal and external business units and coordinating a strategic, consolidated approach to achieve maximum returns for its stakeholders.

Well, maybe not. But visions and missions are in fact important. And doing the properly is bloody difficult... (And the above is from Max Barry's brilliant book, Company.)

Small cap, medium cap, large cap

If big company executives aren't necessarily a good fit for small companies and if small companies are the ones driving the change and the big companies need to change, does the big company executive have any role in a changing organization?

Of course, but Ben Horowitz has an interesting blog post about the mismatches between big company execs and small companies. I was just thinking a couple of steps ahead and wondering if the big companies should bring in small company executives to drive the change. A provocative thought...

Eating out

In the past half a decade I can trace a very clear trend in regards to eating out. During my time as a freshman eating out was something that you did out of necessity: I am incredibly bad at cooking and I had to get food somewhere. It had to be cheap and there had to be lots of it. The typical student strategy, which more often than not resulted in government subsidized student meals twice a day, once at 10.30 when the restaurants opened and another time at 18:00 just before the restaurants closed. In retrospect the food was horrible but I survived.

Eventually your income starts rising and quality of life improving. As a proxy of this phenomenon someone once suggested the size of your stomach: you must be wealthy if you can afford to be fat. That may have worked in the era when only wealthy people could avoid manual labor and grow fat off of their capital income. But, for me the increases in income resulted in middle-of-the-road dining experiences. Chain restaurants. Bad service, mediocre food, and extraordinarily astronomical prices compared to what you got. So in a way this was not my finest hour, but something necessary to learn a bit more about how the world works: there are too many fools that can be ripped off by restaurant chains that play the volume game.

As is typical, after the dark ages people start getting wise again. And in my case my renaissance began when a couple of lawyers provided dinner at Chez Dom. I got interested and checked out the prices, and lo and behold, they were not even that bad. Nowadays a two Michelin star restaurant will serve you lunch for 30 euros: amuse-bouche and three courses. Relatively speaking a fair bit more expensive than your typical 10 euro lunch, but in absolute terms not that horrible. And this was the crème de la crème of Helsinki, mind you.

So, since then I've changed my strategy in regards to eating out. If I'm just hungry, I typically keep a mental list of the places with the cheapest prices for the most amount of food with the boundary condition of a certain threshold in regard to the quality of food (the "no frills" strategy, so to say). And then I have a separate list of places where I will eat if I eat out with other people. The common aspect for those places is that none of them is a chain restaurant, none of them is in the absolute high-end category, but just below (the best is if you are able to find a restaurant that is destined to get their star, but hasn't gotten it yet, so the price point is still slightly lower but the food and service is fantastic). And interestingly enough more often than not the prices are in fact only marginally higher than with chain restaurants and the other places that rip off ignorant middle classes.

And as a result, I can finally say that I am eating better than ever and at a fraction of the cost that I thought this type of life style would require. Unfortunately many people don't see the above dynamic about how middle-of-the-road restaurants rip you off and how much you could better your experience with a marginal increase to the cost. This ignorance also shows up in other aspects of certain people from this group, namely the inability to handle simple processes like reserving tables, arranging dinners, and so on. Fortunately we all have the possibility of choosing who we eat out with and who we engage with. Thank god.

On rejuvenating a company

As has been noted before, my recent interest revolves around aspects of evolution, especially that of industries and companies. Again, the age-old question of why companies die and how that can be avoided remains something of a key question.

Interestingly enough a few months back I was listening to Aubrey de Grey talk about aging and the provocative thought of near-eternal life. The argument supposedly goes metabolism causes unwanted side-effects (or damage) in our bodies over time. Eventually due to the accumulation of damage we end up dying, which on an individual level can be a rather unpleasant experience, depending on circumstances. Anyway, the idea is that by repairing the damage periodically we can rejuvenate the body and in a way turn back the clock. Advances in technology paired with iterative rejuvenation should then result in a situation where we would supposedly escape death indefinitely.

Regardless of whether or not we believe de Grey, I see an interesting analogy between this and what is killing off companies. If we start from a small start up, typically things are very ad hoc and agile, unorganized and clear. With a small amount of people making up the company, things just work. Of course this structure is very fragile and susceptible to all types of problems due to the lack of experience, much like children. The company can stray from its path and end up killed by being run over by competition. But such is life.

Over time the companies that aren't killed get smarter and smarter. They learn how to survive, how to satisfy customers, and so on. The growth is thus happening and typically in order to get the revenue to grow, companies need to scale up and thus recruit new employees. Over time the company must put on some excess weight, or overhead, in the form of administrative roles and structures (e.g. reporting structures, organizational structures, etc.). The structures typically appear to solve some problem. Reporting structures attempt to solve the problem of communication, which arises when enough people work in an organization and it is no longer feasible or possible to have everyone talking to everyone. So, structures in a way should be subordinate to problems.

With size and wealth comes relative stability. A single failure might no longer cause death and the company also learns to view and evaluate the world (or the industry it operates in, which is pretty much the same thing in this case) from the perspective of survival: the organization has learned from past mistakes. Enter path dependence and the increasingly heavy bag of history. Culture and status quo forms and the company keeps growing. Implicit knowledge is taught to new employees and the culture grows. People start doing things in a certain way since that's how it has always been done. The structures solidify and become axiomatic.

Unlike humans who grow and function in a more or less unchanged environment (where the change is so slow that it does not matter from the perspective of an individual human), companies operate in a much more unstable environment. Thus as the market demand changes, the companies must evolve to address new situations. Humans very often don't need to do this: the sun rises tomorrow, much like it did today. But the company must change, it must act differently at different parts of an industry's life cycle. The structures which served one purpose need to be changed to accommodate the changing environment. But as the structures become more and more rigid, change becomes more difficult. Inertia creeps in and damage begins to build up. Eventually if the company isn't able to reinvent or rejuvenate itself, it dies.

I'll admit that the analogy isn't perfect, but the parallels are surprisingly much aligned. Now, what is the practical implication? The older the company, the fatter the organization, the more unable it is to change and eventually it will get killed off, either by its own inability to function or alternatively it will get eaten up by the new breed of predators. Some people have argued that action comes from structure, and if we accept this, then its clear that to get different action the structure must change. So thus, to put it very bluntly, the rejuvenation of the company means the breaking of existing structures to build room for new structures.

First impressions

I recently had a learning experience interviewing people for a job. It was my first experience with something like that and what a learning experience it was to sit on the other side of the table and look at the situation from a completely different perspective. I thought that I would try to summarize some key things to keep in mind if and when I'm on the "regular" side of the table again in the future...

1) First impression matters. Exclamation mark. Seriously, it's a cliche, but I would say that judging by my experience it held very much true. The impression that I got from the first few minutes would typically hold true for the entire course of the interview. So try to get that right.

2) Be prepared and have your papers in order. Due to various reasons I didn't have the possibility to get very much acquainted with the CVs in advance, so it would be beneficial to bring a complete set of all relevant documents to the interview. If you intend to show something, be prepared in advance; asking the interviewer to lend you a laptop for showing something from online is somewhat awkward.

3) Answer the questions. It was quite surprising to me to run across some cases where people wouldn't answer the question they were asked. They would instead circle around the question. If you don't know the answer, the next best thing from my view would be to admit it. If you may have some clue, you could open up your thinking by explaining out loud, but in this case it should be clear where you're going with your answer. As a spin off of this, know what you know and more importantly know what you don't know. Trying to bluff the interviewer is hazardous: it is very much possible that the interviewer will know more than you and if you get caught bluffing, that is not good.

4) Open questions are a lot more fun for the interviewer. If, however, the interviewer starts asking simple and direct, closed questions, this may potentially be a bad sign. In my case once I didn't get satisfactory answers for open questions and I needed to just see if the interviewee knew anything of the subject, I would narrow my questions and form them more like exam questions and ditch the discussion or dialogue approach.

5) Be active. If the interviewer needs to drag out all the bits and details from you, it reflects somewhat badly on the perception that people are getting from you: are you really the go-getter type of person? Ask questions, show interest.

I guess there were also other things I noticed, but these were some of the top things that came to my mind. Now that I've written them down on paper, most of them seem like common sense. And I guess they are precisely that.

A short introduction to investment banking...

On human capital

Being in a happy position of still retaining the title of student I've been able to talk to a fair amount of different companies and their representatives. On top of the network of people who you've sat with and solved differential equations in Mat-1.1120 also talk a bit about where they've ended up and what they're doing. The insights about how the market and employers work is a rather illuminating experience and it seems that the age old rules of thumb still apply...

Some say that if you truly want to learn, go to a small company or start your own. You get your hands dirty and learn by doing. The salaries aren't that great, but you get a sense of accomplishment when you ship something to the customers or finish a project and see how you've made a tangible difference somewhere. It's also a world where bullshit doesn't fly; the small companies don't have the luxury of employing the standard mid-level management. If it doesn't contribute to the bottom line in one way or another, it won't fly.

On the other end of the scale we have the multinationals. Compared to the startups the difference is drastic: you actually get paid every month regardless of the financial success of your company, which is sort of cool. The nature of the game also changes: you start doing more abstract things and at times it may not even be clear who exactly is paying your salary and why they are doing so. But it enables you to spend a lot more time just thinking about things instead of having to run around trying to ensure that the company will survive next month as well, which is often the top priority in smaller companies.

Salary-wise it's actually interesting. I guess with large companies the salaries follow a bell curve with the average being some decent middle-class figure. The start-up world in turn may also follow a bell curve, but the average is way lower and the variance is very much higher: you get shitty salary but if things go will, your equity stake will be worth a nice and tidy sum... Something that doesn't typically happen in the Fortune 500 companies. Or that's anyway the feeling I had. Recently I've started to think that maybe even the large companies are not that uniform: some get a totally shitty salary, more people get a decent salary, then there's a gap, and finally the few get paid enormous amounts in various types of compensations.

But the practical implication, then, is the age old notion that if you want to do cool stuff, go start companies or join small companies. You won't necessarily get great financial rewards, but it'll be pretty goddamn fun. If, on the other hand, you want to be sure that you'll never make a difference in anything but aren't hanging by a thin thread either, go to a big company.

The question is thus the following: having experienced both worlds, which one do I actually want to belong to? The sense of accomplishment is far greater in the startup world, but the big companies are places where you can grow old and fat without having to really worry about anything...