our of the most interesting things this I learnt this week:
- Humans can survive on the same amount of energy as an incandescent light bulb. Yet, we use 30 times more energy than that, on average, every day.
- Democratic elections are similar to how bees chose a new location for their hive.
- The internet revolution is just beginning. It doesn't take much imagination to see how it could create $100 trillion of value over the next twenty to thirty years. For reference, the S&P 500 is worth $30 trillion today.
- Mikaela Shiffrin, the world's best skier, chose to skip races in favour of training when she was young.
1. Human Energy Population
The global human population, measured by the amount of energy we use, is around 280 billion. About 30 times higher than our actual population of 7.8 billion.
Based on our body size, humans have a basic metabolic rate of 100 watts. That is, we need to generate about 100 watts of energy to grow, survive and reproduce.
On average, across the world, we use about 3,000 watts. 30 times more than we need. In developed countries, where we have easy access to electricity and transport, we use closer to 11,000 watts. 110 times more than we need.
Unsurprisingly, no other species on the planet comes close to the amount of energy we use to fuel our lives. Their energy consumption lines up neatly against their body size.
2. Politics of Sting
The way in which bees choose a new hive location is similar to the way humans organise democratic elections and choose their next leaders.
Scout bees are encoded with simple genetic instructions that motivates them to search for potential hive sites. When a scout finds a potential site, she returns to the swarm and does a “waggle” dance to advertise her discovery. Her dance tempts other scouts to check out the site and return to give a dance of their own.
Key to this process isa positive feedback loop. The more a scout likes the look of the new site, the longer she dances for. Eventually, when a sufficient quorum of scouts form at one of the locations, it becomes the final choice.
Remarkably,this process doesn’t need a central authority handing out instructions. The actions and observations of each individual scout drives the system.
The most surprising thing? Both theoretical models and field experiments show that bees tend to make the best choice from their range of available options. The mechanism of scouting, communicating, and verifying in increasingly greater numbers causes seemingly better options to be explored more intensively. As long as the quorum is large enough, the vagaries of the initial search process diminish and the hive ends up making the right final choice.
The political process is similar. Candidates resemble potential hive locations, while media attention, campaign donations, social media posts and bumper stickers perform the scouts’ “waggle.”
As a candidate’s political fortunes rise or fall, he or she generates more or less attention, or “buzz”, creating the feedback loop.As long as this feedback loop is tied roughly to the true quality of each candidate, as with the new beehive location, the apparent chaos of the system tends to result in a well-ordered final choice.
3. The Internet Opportunity
Investors spend a lot of time thinking about how and when things get worse so it’s refreshing to hear a simple and concise version of why there’s still so much progress to come and where it might come from.
In 1997, Jeff Bezos was asked why he started Amazon. He replied,
“I was in New York City working for a quantitative hedge fund when I came across the startling statistic that web usage was growing at 2,300 percent a year. So I decided I would try and find a business plan that made sense in the context of that growth.”
A quarter of a century later, it feels like we’re close to exhausting the internet’s growth and it's potential to change our lives.
But Ram Parameswaran disagrees. On Invest Like the Best, he put it like this.
We always want to find the next new thing but perhaps that next big thing is already staring us in the face. We just need to turn the lights on. We might feel like we’re already so dependent on the internet but if you look at the numbers, the internet accounts for only a fraction of business globally.
- For every $100 dollars of profit earnt by businesses across the world, internet companies account for between $5 and $7 only.
- If you look at the market value of internet businesses, while higher than their share of global profits, they’re still only a fraction of the value of all businesses globally – around 10% to be more precise.
- Stripe, a payments company for online businesses, has an explicit aim to increase the GDP of the internet. They say, “despite internet businesses growing faster than the rest of the economy, only about 3 percent of global commerce happens online today.
The internet might be 30 years old now, it’s adoption curve might have flattened, but those very facts, that the internet has become a utility for us, makes Ram believe we’re just at the beginning of the internet’s true potential.
For the first time, we have ubiquitious high-speed connectivity on mobile devices. We have cloud infrastructure that allows every single piece of global GDP to become part of the mobile internet. And the past year has made it clear that borders aren’t boundaries for businesses. Talent is globally, not locally, discoverable now.
"And so, when you put together the explosion of people capability, explosion of tools, and connectivity together, we definitely believe that over the next 20 to 30 years, we go up that S curve from a 10% penetration rate to 50-60-70% in the course of time."
What does Ram think that might be worth in dollar terms?"You can very conservatively say there's a $100 trillion-plus opportunity ahead of us still."
For detail on where that value might come from, listen from 04:02 onwards, here.
4. Practice vs. Racing
Mikaela Shiffrin, the two-time Olympic gold medallist and second most successful women's skier ever, talked about her approach to training as a junior ski racer on the Just Women's Sports podcast.
She said, as a skier, race days are very unproductive. You do a course inspection, one or two practice runs, and then you ski the race itself. Given it takes around 60 seconds to ski a slalom course, you're only on your skis for about 4/5 minutes in total.
In many ways, there's not much you can do. You have to race. The unproductive nature of these days is an occupational hazard for ski-racers. But Mikaela made the point thather team - her coach and parents - realised that it was better for her to race sparingly when she was young. It would be better for her long-term prospects to train instead of race.
When you train, you get far more time to ski, to practice your technique and to hone your craft. It was about getting reps in, and they felt there was way more upside from spending time in training than there was from winning races.
Who knows whether it played a big role in her future success or not but it's an interesting anecdote and adds a few more snowflakes of evidence to the importance of long-term thinking and favouring boring, elementary steps over shiny, temporary opportunities.