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Hi friend, 

Remember what I said about 2021 and don't 'build me up buttercup'?  Well...stocks are up.  That's the good news.

This is not a political newsletter.  Yet certain beliefs aren't political.  There should be a peaceful transfer of power.  We should respect the democratic process.  Rule of law should prevail. 

Society is a collection of individuals making choices and taking action.  And those actions having consequences.  Non-actions also have consequences.  And it's not immediately clear the short or long-term impacts.  I'm optimistic about the power of federalism, decentralized power, the ability for cool heads and truth to prevail. 

Which makes me wonder, where is Jack Ma?
 
Today's Contents:

  • Weekly Song: Purple Rain
  • Obviously The Future: Gaming
  • Factorio Lessons
  • Good Reads
  • Community Corner

Weekly Song: Purple Rain

Prince was a man ahead of his time. 

Why Purple Rain this week?  Prince felt the color purple symbolized the end of the world.  He said, “When there’s blood in the sky – red and blue = purple… purple rain pertains to the end of the world and being with the one you love and letting your faith/god guide you through the purple rain.”  Prince would say the apocalyptic connotations of the color purple made it his favorite color.

I'm not saying we're at the apocalypse, but I'd like to see some red and blue come together to rain purple down on the White House and expunge the orange. 
 

"Purple Rain" by Prince

Honey, I know, I know, I know times are changin'
It's time we all reach out for something new
That means you too

You say you want a leader
but you can't seem to make up
your mind
And I think you better close it
and let me guide you to
the purple rain

Purple rain, purple rain
Purple rain, purple rain

If you know what I'm singin'
about up here, come on
raise your hand
Purple rain, purple rain

Declarative Statements Playlist

Obviously The Future: Professional Training through Gaming 

 

Situation: Three realities shape professional skill development and assessment.  

First, learning is difficult.  Learning new skills takes focus and dedication.  To achieve a high degree of competence at any given skill requires persistence over a long period.  Additionally, the achievement of learning, particularly higher-order skills, is often difficult to measure.  Exams are imperfect and often narrowly precise. 

Second, AI and automation increasingly hallow out training-on-the-job.  Automation and software have produced error-proof technology to replace many previously manual tasks.  These include increasingly high-skill tasks like flying airplanes, making accounting reports, and gathering and cleaning data.  The result is fewer errors for things that are routine, but now there are larger, more catastrophic errors when a higher-order skill is called upon and doesn't exist because of skill degradation.  A prime example is airplane malfunction as I've described before: GPT-3 and the Curse of De-Skilling.

Third, many companies are suffering from a skill gap.  To close the gap, at least in the US, companies avoid paying for skill development and instead either hire fully skilled employees or outsource the function to specialists. 

 

Solution: Online Games and Simulations

Online games and simulations are no longer just for kids.  Given their increasing sophistication, they can also be used to develop higher-order functional, skills such creative problem solving, collaboration, and strategy.  This means they are a viable tool for learning and demonstrating mastery of skills.

The research indicates support for video game performance:

Using games and simulations is a well-researched, efficacious learning technique.  Playing through games can drive engagement and make the persistence aspect of learning easier.  This pedagogical approach is not new.  There are many online games used in learning, particularly for grade-schoolers demonstrating the potential.  Now is the time to see more of this for professionals. 

Academic research supports this proposition as well. 

  • Good gamers, good managers?  A proof-of-concept study with Civilization: Under controlled laboratory conditions, we asked forty business students to play the Civilization game and to participate in a series of assessment exercises.  We find that students who had high scores in the game had better skills related to problem-solving and organizing and planning than the students who had low scores.
  • Exploring the relationship between video game expertise and fluid intelligence (article)
    • We discuss and extend previous videogame literature on intelligence and videogames and suggest that commercial video games can be useful as 'proxy' tests of cognitive performance at a global population level.

Inflection point

The idea of learning and assessing skills through games and gaming is not new.  Google has used logic puzzles in its hiring process for years. The US Air Force has hired video game players as drone operators and seen strong results.  Many startups have tried to devise a solution and so far it is difficult to point to a clear winner.  Why has it been a challenge?

First, many of the directly marketed solutions hadn't proved reliable in indications of skill competency.  The dedicated solutions overpromised, and employers hesitate to adopt a half-baked solution.

Second, there's been a stigma around gaming as something for children and that play was antithetical to professionalism.  Yet now the popularity of gaming among the fast-growing and profit-dominating technology companies made the value visible. 

Third, developing a high-quality video game can be expensive.  The best game developers have used their skills for the die-hard gaming community, and the strategic money has been behind video games as the next big form of entertainment and not as deliberate about the educational elements. 
 

That's beginning to change. 

Costs are going down.  With the rise of platforms like Unity and Roblox, the cost to make a high-quality game is lower than ever before and dropping quickly.  This should decrease the barrier to entry and new entrants should join the field. 

Video game use is flourishing.  They are now more accessible and widely adopted.  55% of Americans played a video game in 2020. 

Video game performance is being seen as a credential for hiring.  At least at Shopify. 

Companies indicative of this trend and further reading:

  • Shopify (see above)
  • All the gaming/metaverse companies - Unity, Roblox, Epic
  • Examples of directly educational games: Civilization, Factorio, FoldIt (protein folding), Glo-Bus (business strategy)
  • Gamification in recruiting effectiveness 

Lessons from Factorio

Sorry folks.  It is going to have to be next week :)

If you know what I'm singin'
about up here, come on
raise your hand
Good Reads


Matt Levine is BACCCKKKK! But his emails are so looooong. 

Waiting For The Last Dance: The Hazards of Asset Allocation in a Late-stage Major Bubble. This one by Jeremy Grantham at GMO is bleak but he gives a timeline for when he thinks the bubble peak might be: Summer 2021.  The opposite analysis can be found in VC Twitter:



Housing market predictions for 2021 from Redfin.  Interesting as always. 

Being an Amazon Seller in 2020: Year in Review.  I love some good primary sources.

Two Worlds: So much Prosperity, so much Inequality.  I changed the title a bit of the latest blog from Morgan Housel.  The best part is the walking through the analysis that concludes in: American households have $1 trillion more in checking accounts today than they did a year ago. For perspective, they held $800 billion in checking accounts a year ago.  The caveat is that the distribution of that $1 trillion is highly unequal. 

Community Corner

I see you, friends. 

Stephen Bediako was awarded an OBE (Order of the British Empire), an honor bestowed by the Queen, for services to Innovation in the Charitable Sector, particularly during the Covid-19 Response.  His written statement here.  Massive congratulations, Stephen. 

Thank you for reading. Please always be in touch. 

Best,
Katelyn

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