Hi all,
Welcome to Signals & Stories, where we explore the signals that lead to better decisions—in life and business.
To counterbalance the euphoria about AI, it's refreshing to hear some thoughtful skepticism. In “Excuse me, but the industries AI is disrupting are not lucrative”, Erik Hoel introduces the supply paradox of AI:
“The easier it is to train an AI to do something, the less economically valuable that thing is. After all, the huge supply of the thing is how the AI got so good in the first place.”
For example, the vast troves of available image data means that creating new AI illustrations is easy. But most disrupted human illustrators did not make much money in the first place…
Have a good start to the week, and thank you for reading.
—Brendan
📖 Waiting for the planes to land
“In the South Seas there is a Cargo Cult of people. During the war they saw airplanes land with lots of good materials, and they want the same thing to happen now. So they’ve arranged to make things like runways, to put fires along the sides of the runways, to make a wooden hut for a man to sit in, with two wooden pieces on his head like headphones and bars of bamboo sticking out like antennas—he’s the controller—and they wait for the airplanes to land. They’re doing everything right. The form is perfect. It looks exactly the way it looked before. But it doesn’t work. No airplanes land. So I call these things Cargo Cult Science, because they follow all the apparent precepts and forms of scientific investigation, but they’re missing something essential, because the planes don’t land.”
—Richard Feynman, 1974 Caltech Commencement Address
Today, there are still at least **checks notes** 8 documented cargo cults that are still active in the Pacific.
Take the John Frum cult on Tanna Island. The practitioners paint the initials U.S.A. on their bare chests. They march around with bamboo rifles. They have a bamboo control tower and satellite dish. And just as Feynman observed 50+ years ago, they still wait for planes to drop cargo.
🧠 Cargo culting
The Melanesian cargo cults can give you a bit of a chuckle (or cringe). They can also serve as a warning—albeit an extreme one—of what can happen when you blindly copy some ritual or routine without fully understanding the underlying causal mechanisms. You not only waste your time doing something completely ineffectual, but you do it without even realizing it, which makes it hard to even diagnose!
“Cargo culting”, or superficially copying others, is a negative decision-making signal you should always avoid.
Example 1: Marathon “Runners”
Many runners hoping to improve their game often ask me about what kind of shoes I wear (are they carbon-plated?), the flavor of gummies I eat (and how many?), or the kind of watch I use. I don’t think anyone has ever once asked me about the mileage plan I followed when I trained for the Boston Marathon. Without realizing it, they focus on copying the superficial, ritualistic activities that have little to do with running an exceptional race!
Example 2: Startup Founders
Y Combinator partners Michael Seibel and Dalton Caldwell argue that cargo culting is rampant in startups too. The problem is that founders will superficially copy the strategies of other companies, even if those companies are completely different or aren’t even objectively successful.
If Google hired tons of engineers and had a colorful logo, I should too
If Uber broke laws and scaled quickly, I should too
If XYZ.ai startup raised a big round, and the founder is going to these conferences and posting multiple times a week on social media, I should spend my time doing those things too
Siebel and Caldwell’s solution to cargo culting is what all great founders already know: focus on serving the customer first.
“Do people care about the Google logo or do they care that they get search results that are good?”
Then, you can thoughtfully adapt (instead of superficially plagiarize) certain ideas from companies that may help you better serve your customers or improve your brand.
Example 3: Cooking
There is a story of a mother who would always cut-off the ends of a pot roast before putting it into an oven. When her young daughter asked her why, she could only explain that her own mother did it that way. The daughter then called the grandmother, and she gave the same answer. Finally, the great grandmother explained: she cut-off the sides so that the roast would fit into the small oven she owned in her first house…
Example 4: Investors
In 2016, when VC Leo Polovets wrote a thoughtful article on cargo culting broadly in tech, below were the common VC investor practices he noticed were often blindly copied:
“Having a policy of requiring warm intros and not replying to cold emails. This is a reasonable system for very busy investors, but many investors are not that busy. And some cold emails are pretty damn good.”
“Co-investing blindly whenever a top VC is investing. While top VC firms have a lot of hits, they have a lot of misses, too. Trying to co-invest with them on every deal is a mistake.”
“Being intolerant of tech outsourcing and only investing in companies with technical cofounders. Companies like Slack and Github outsourced pieces of their initial products. Other companies, including Pinterest and Whisper, didn’t have engineering cofounders.”
In public market investing, author Morgan Housel observes how many young investors often blindly copy the strategies of Warren Buffett or Benjamin Graham, without fully understanding that those strategies no longer apply to today’s economic environment:
“Graham advocated purchasing stocks trading for less than their net working assets—basically cash in the bank minus all debts. This sounded great, but no stocks actually trade that cheaply anymore—other than, say, a Chinese pharmaceutical company accused of accounting fraud, or a shell company run out of a garage in Toledo. No thanks.”
—“Markets Change. So Should You”, Morgan Housel
💡Summary
So, what are the magical keys to avoid cargo culting? In the shameless spirit of being a consultant, let’s use the acronym CULT:
Catch the warning signs. Paraphrasing Leo Polovets, if you do something merely because 1) it’s what everyone else does, 2) it’s what your manager/parent does, or 3) it’s what you think is expected of you, you might be cargo culting.
Understand that other people or organizations can serve as helpful influences to your own work, as long as you also contribute your own original thinking and don’t blindly copy them.
Listen to any critical questions or feedback from others, especially those from unbiased observers. Remember the daughter in the cooking example: she asked a critical question that cracked the cargo culting habit.
Test (and question) your own assumptions behind your decisions. While unbiased observers are ideal, you also need to do your own homework. Why do you want to get an MBA? What assumptions are you explicitly making about this decision?
**Thank you to Dan McGlinn for reading an early draft of this article.**
Thanks for reading!
Signals & Stories is a newsletter that explores the recurring patterns we can recognize to make better decisions—in business and life.
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—Brendan