Josh Reich

Josh Reich (JR) is a med school drop out, former CEO of the online bank, Simple, and former goat and cattle farmer. He recently moved back to Australia after 17 years in America. When not spending time with his wife and two toddlers, he dabbles in electrical and mechanical engineering projects.Josh here. A few weeks ago a piece in the Times about the UK retailer Timpsons caught my eye. The CEO talks about how he has eschewed the modern trend for big-data analytics to focus on two numbers: sales and customer satisfaction.“The businesses we bought were often collecting vast amounts of data from their fancy tills, yet the managers were actually reading very little of it, and it rarely helped colleagues give better customer service. As sales plummeted, they analyzed more data, and brought in more finance experts and consultants to work out where the problems were.”It’s easy to feel safe in a cocoon of charts and graphs. Many of us look at numbers every day and we’re generally good at making up stories to explain them. In business, competing departments have very plausible explanations of why numbers change. It’s easy to congratulate yourself for when things are going up and to the right, and equally easy to convince yourself that external factors explain any dips.As Fred Brooks put it in his classic technology management book The Mythical Man Month, “Show me your flowchart and conceal your tables, and I shall continue to be mystified. Show me your tables, and I won't usually need your flowchart; it'll be obvious.”Why is this interesting?Like a lot of lessons in life around startups, it’s taken me a few tries to internalize this idea. I walked into my mandatory first-year business school data analysis class with a lot of confidence. By that point I had already been the CTO of a marketing analytics company and had tested out of all the other introductory statistics and math classes. One of our first assignments was to analyze a largeish data set and develop a predictive model. I ran into the project convinced I was going to nail it and wrote up a far longer report than required.What I missed was that a small percentage of the rows in the original file were improperly formatted, so I discarded them from the set, figuring it was uncorrelated noise. It turned out that those rows were key to understanding the underlying problem. The fact that I can’t even remember what the data was about tells the entire story. Without understanding the micro, it is very easy to completely misinterpret the macro.Of course, I wrote the lesson off as a trick by the professor—only to have to learn it again in the real world just a few years later.After graduating I was working at a startup that was running a marketplace where advertising companies would source leads for mortgage companies, who would then bid for those leads in the market. People applying for mortgages aren’t completely fungible. There are many dimensions that need to match between the mortgage companies and the applicants. As such, the market was complicated to run. It was interesting from a mathematical and financial standpoint. I read books about market microstructure and wrote a paper about market making price algorithms for multidimensional markets.As the tide was turning on the mortgage market, the board moved to replace the founder and CEO with a seasoned bond market veteran. On her first day, she asked me to produce a report of market operations. I was excited to nerd out and provided a series of charts that I looked at every day to track market depth, clearing prices, supply & demand mismatches, etc. She had a quick look at my charts and promptly asked me to walk her through every single bid and ask that was placed on the market the day before.I thought she was nuts. I told her that her request would take forever and she told me that she had no plans for the evening and neither should I.She asked me to load up as much as I could into Excel and we began the drudgery of looking at each bid and ask. When the trades didn’t match, she’d ask me why. I took the exercise as an attempt to find faults in the software I was responsible for that executed the matching and trades. She wasn’t really looking for bugs, though, she just wanted to ensure she understood the business she was now running. As I found myself at a loss for explanations of individual trades, I realized my grasp on the market was a lot less firm than I thought.In producing the charts that I used to manage the business, I had assumed that I was operating at the right level of abstraction. But it turns out that I had assumed too much about how the market should work. High level reports miss the nuance. They aggregate up to the measures that you assume matter. Doing the grunt work of piece by piece analysis was at first boring, then enlightening.By the end of the night we had a plan to improve the business significantly. By the end of the year Lehman was bankrupt and the mortgage market we were running was no longer relevant.But the lessons I learned have stuck with me. You need to immerse yourself in the micro before you can even pretend to know what’s important about the macro. (JR)Story of the Day:Thanks to a viral Tweet about the difference in attitudes of men and women about fighting geese, I returned to this amazing California Sunday story about an Alaskan town overtaken by eagles. (NRB)Quick Links: 25 edits that define internet video (CJN)A Blackbirdspyplane retrospective (CJN)A new menswear designer for JCrew (CJN)Thanks for reading,Noah (NRB) & Colin (CJN) & Josh (JR)—Why is this interesting? is a daily email from Noah Brier & Colin Nagy (and friends!) about interesting things. If you’ve enjoyed this edition, please consider forwarding it to a friend. If you’re reading it for the first time, consider subscribing (it’s free!).

The Micro to Macro Edition

Josh Reich (JR) is a med school drop out, former CEO of the online bank, Simple, and former goat and cattle farmer. He recently moved back to Australia after 17 years in America. When not spending time with his wife and two toddlers, he dabbles in electrical and mechanical engineering projects. He also wrote The Micro to Macro Edition.Josh here. Right now on eBay you can find a used 25” Cathode Ray Tube (CRT) monitor. It’s not HD, doesn’t have digital inputs, it’s big, and it’s heavy. It’s also $2,500.For years, if you were looking to buy a CRT monitor or TV, you could find them for essentially $0 at thrift stores or on the side of the road. But those days have gone. And clearly the supply of new CRTs has diminished to zero. But the price wouldn’t be this high unless there was demand.Why is this interesting?The demand for CRTs doesn’t come from their superior contrast—you can get that from modern OLEDs and event LCDs\. Rather, it comes from the fact that they’re cool.If you look at eBay, you’ll see that CRTs are being marketed to retro-computing gamers. Old games are low resolution affairs, so the pixelated graphics play well with the distinct phosphors behind the glass of a CRT. Today, with Retina™ phone displays and 8K TV’s, we’re forgetting what pixels look like. On a CRT, they’re hard to miss.There’s an authenticity that comes from using a real CRT. If you’ve gone to the trouble of saving a classic 80’s arcade game from a dumpster—replacing all the leaky capacitors on the logic boards and touching up the graphics on the cabinet—it would be a shame to replace the broken display with an LCD panel. It would be like sticking a Prius engine in your fully restored ‘68 Camaro.The other reason that CRT’s are cool is because they’re analog devices. CRTs come from an era before integrated circuits. They are the last actively used vestiges of the era of vacuum tube electronics. The circuit that decodes a TV signal and converts it into the movement of an electron beam to generate an image is pretty straightforward. This is pretty important for retro computing in general. Before the capabilities unlocked by digital processing, a variety of hacks were used to push the limits of the technology of the time. To start with, TV and some computer graphics modes would split each frame into two fields, one half containing the odd lines, followed by even lines from the image. There’s no easy way to display interlaced footage on a modern progressive mode screen. Naively adding the two fields together into a single frame results in jarring motion blur that appears as every second line being offset. It gets even worse with the wide range of frame rates and scan rates exploited by game designers to make the most of technology of the time. Many of those games won’t even display on an LCD due to their use of technically unsupported graphics modes. Jon Postel, one of the key architects of the internet, had a principle for the design of distributed systems: “Be conservative in what you do, be liberal in what you accept from others.” Analog electronics frequently obey Postel’s law, either by design, or because they’re too dumb to know better. If you’re of a certain age, you’ve had the experience of a well loved audio tape still playing with all of its warps and warbles from the tape being stretched. Analog devices frequently have elegant failure modes—unlike the jarring skips on scratched CDs.You can take the RCA audio cable coming out of your stereo and stick it into the composite video input of an old CRT TV—and you’ll see stuff. Stuff that’s in sync with the music. The designers of the analog video standard never expected you to do that, but it works because of how basic the circuitry is that interprets what it should expect. Audio signals look nothing like a video signal, but the circuitry chugs along and does its best. If your modern LCD TV even has an analog video input, it will just show a blank screen if you put a non-compliant signal into it. That’s boring.There’s an entire world of folks—modern-day descendants of Nam June Paik—who abuse analog video signals for creative purposes. There’s video artists, VJs, and folks just tripping out to the weird stuff that happens. That kind of creativity only works on CRTs. (JR)Quick Links:Dalibor Farny - a guy with a workshop in a castle making new stock Nixie tubes. (JR)Graphics Gremlin - a homebrew retro video card that lets you play old games on LCDs. (JR)The Criminals Thought the Devices Were Secure. But the Seller Was the F.B.I. (NRB)[Sponsored Link] If you’re at a SaaS company, check out Variance. It’s a tool to help grow customers (some people are calling it a PLG CRM). If you have questions or want to try it, get in touch. (NRB)Thanks for reading,Noah (NRB) & Colin (CJN) & Josh (JR)—Why is this interesting? is a daily email from Noah Brier & Colin Nagy (and friends!) about interesting things. If you’ve enjoyed this edition, please consider forwarding it to a friend. If you’re reading it for the first time, consider subscribing (it’s free!).