More on Economics & Investing
Trevor Stark
3 years ago
Economics is complete nonsense.
Mainstream economics haven't noticed.
What come to mind when I say the word "economics"?
Probably GDP, unemployment, and inflation.
If you've ever watched the news or listened to an economist, they'll use data like these to defend a political goal.
The issue is that these statistics are total bunk.
I'm being provocative, but I mean it:
The economy is not measured by GDP.
How many people are unemployed is not counted in the unemployment rate.
Inflation is not measured by the CPI.
All orthodox economists' major economic statistics are either wrong or falsified.
Government institutions create all these stats. The administration wants to reassure citizens the economy is doing well.
GDP does not reflect economic expansion.
GDP measures a country's economic size and growth. It’s calculated by the BEA, a government agency.
The US has the world's largest (self-reported) GDP, growing 2-3% annually.
If GDP rises, the economy is healthy, say economists.
Why is the GDP flawed?
GDP measures a country's yearly spending.
The government may adjust this to make the economy look good.
GDP = C + G + I + NX
C = Consumer Spending
G = Government Spending
I = Investments (Equipment, inventories, housing, etc.)
NX = Exports minus Imports
GDP is a country's annual spending.
The government can print money to boost GDP. The government has a motive to increase and manage GDP.
Because government expenditure is part of GDP, printing money and spending it on anything will raise GDP.
They've done this. Since 1950, US government spending has grown 8% annually, faster than GDP.
In 2022, government spending accounted for 44% of GDP. It's the highest since WWII. In 1790-1910, it was 3% of GDP.
Who cares?
The economy isn't only spending. Focus on citizens' purchasing power or quality of life.
Since GDP just measures spending, the government can print money to boost GDP.
Even if Americans are poorer than last year, economists can say GDP is up and everything is fine.
How many people are unemployed is not counted in the unemployment rate.
The unemployment rate measures a country's labor market. If unemployment is high, people aren't doing well economically.
The BLS estimates the (self-reported) unemployment rate as 3-4%.
Why is the unemployment rate so high?
The US government surveys 100k persons to measure unemployment. They extrapolate this data for the country.
They come into 3 categories:
Employed
People with jobs are employed … duh.
Unemployed
People who are “jobless, looking for a job, and available for work” are unemployed
Not in the labor force
The “labor force” is the employed + the unemployed.
The unemployment rate is the percentage of unemployed workers.
Problem is unemployed definition. You must actively seek work to be considered unemployed.
You're no longer unemployed if you haven't interviewed in 4 weeks.
This shit makes no goddamn sense.
Why does this matter?
You can't interview if there are no positions available. You're no longer unemployed after 4 weeks.
In 1994, the BLS redefined "unemployed" to exclude discouraged workers.
If you haven't interviewed in 4 weeks, you're no longer counted in the unemployment rate.
If unemployment were measured by total unemployed, it would be 25%.
Because the government wants to keep the unemployment rate low, they modify the definition.
If every US resident was unemployed and had no job interviews, economists would declare 0% unemployment. Excellent!
Inflation is not measured by the CPI.
The BLS measures CPI. This month was the highest since 1981.
CPI measures the cost of a basket of products across time. Food, energy, shelter, and clothes are included.
A 9.1% CPI means the basket of items is 9.1% more expensive.
What is the CPI problem?
Here's a more detailed explanation of CPI's flaws.
In summary, CPI is manipulated to be understated.
Housing costs are understated to manipulate CPI. Housing accounts for 33% of the CPI because it's the biggest expense for most people.
This signifies it's the biggest CPI weight.
Rather than using actual house prices, the Bureau of Labor Statistics essentially makes shit up. You can read more about the process here.
Surprise! It’s bullshit
The BLS stated Shelter's price rose 5.5% this month.
House prices are up 11-21%. (Source 1, Source 2, Source 3)
Rents are up 14-26%. (Source 1, Source 2)
Why is this important?
If CPI included housing prices, it would be 12-15 percent this month, not 9.1 percent.
9% inflation is nuts. Your money's value halves every 7 years at 9% inflation.
Worse is 15% inflation. Your money halves every 4 years at 15% inflation.
If everyone realized they needed to double their wage every 4-5 years to stay wealthy, there would be riots.
Inflation drains our money's value so the government can keep printing it.
The Solution
Most individuals know the existing system doesn't work, but can't explain why.
People work hard yet lag behind. The government lies about the economy's data.
In reality:
GDP has been down since 2008
25% of Americans are unemployed
Inflation is actually 15%
People might join together to vote out kleptocratic politicians if they knew the reality.
Having reliable economic data is the first step.
People can't understand the situation without sufficient information. Instead of immigrants or billionaires, people would blame liar politicians.
Here’s the vision:
A decentralized, transparent, and global dashboard that tracks economic data like GDP, unemployment, and inflation for every country on Earth.
Government incentives influence economic statistics.
ShadowStats has already started this effort, but the calculations must be transparent, decentralized, and global to be effective.
If interested, email me at trevorstark02@gmail.com.
Here are some links to further your research:
Ray Dalio
3 years ago
The latest “bubble indicator” readings.
As you know, I like to turn my intuition into decision rules (principles) that can be back-tested and automated to create a portfolio of alpha bets. I use one for bubbles. Having seen many bubbles in my 50+ years of investing, I described what makes a bubble and how to identify them in markets—not just stocks.
A bubble market has a high degree of the following:
- High prices compared to traditional values (e.g., by taking the present value of their cash flows for the duration of the asset and comparing it with their interest rates).
- Conditons incompatible with long-term growth (e.g., extrapolating past revenue and earnings growth rates late in the cycle).
- Many new and inexperienced buyers were drawn in by the perceived hot market.
- Broad bullish sentiment.
- Debt financing a large portion of purchases.
- Lots of forward and speculative purchases to profit from price rises (e.g., inventories that are more than needed, contracted forward purchases, etc.).
I use these criteria to assess all markets for bubbles. I have periodically shown you these for stocks and the stock market.
What Was Shown in January Versus Now
I will first describe the picture in words, then show it in charts, and compare it to the last update in January.
As of January, the bubble indicator showed that a) the US equity market was in a moderate bubble, but not an extreme one (ie., 70 percent of way toward the highest bubble, which occurred in the late 1990s and late 1920s), and b) the emerging tech companies (ie. As well, the unprecedented flood of liquidity post-COVID financed other bubbly behavior (e.g. SPACs, IPO boom, big pickup in options activity), making things bubbly. I showed which stocks were in bubbles and created an index of those stocks, which I call “bubble stocks.”
Those bubble stocks have popped. They fell by a third last year, while the S&P 500 remained flat. In light of these and other market developments, it is not necessarily true that now is a good time to buy emerging tech stocks.
The fact that they aren't at a bubble extreme doesn't mean they are safe or that it's a good time to get long. Our metrics still show that US stocks are overvalued. Once popped, bubbles tend to overcorrect to the downside rather than settle at “normal” prices.
The following charts paint the picture. The first shows the US equity market bubble gauge/indicator going back to 1900, currently at the 40% percentile. The charts also zoom in on the gauge in recent years, as well as the late 1920s and late 1990s bubbles (during both of these cases the gauge reached 100 percent ).
The chart below depicts the average bubble gauge for the most bubbly companies in 2020. Those readings are down significantly.
The charts below compare the performance of a basket of emerging tech bubble stocks to the S&P 500. Prices have fallen noticeably, giving up most of their post-COVID gains.
The following charts show the price action of the bubble slice today and in the 1920s and 1990s. These charts show the same market dynamics and two key indicators. These are just two examples of how a lot of debt financing stock ownership coupled with a tightening typically leads to a bubble popping.
Everything driving the bubbles in this market segment is classic—the same drivers that drove the 1920s bubble and the 1990s bubble. For instance, in the last couple months, it was how tightening can act to prick the bubble. Review this case study of the 1920s stock bubble (starting on page 49) from my book Principles for Navigating Big Debt Crises to grasp these dynamics.
The following charts show the components of the US stock market bubble gauge. Since this is a proprietary indicator, I will only show you some of the sub-aggregate readings and some indicators.
Each of these six influences is measured using a number of stats. This is how I approach the stock market. These gauges are combined into aggregate indices by security and then for the market as a whole. The table below shows the current readings of these US equity market indicators. It compares current conditions for US equities to historical conditions. These readings suggest that we’re out of a bubble.
1. How High Are Prices Relatively?
This price gauge for US equities is currently around the 50th percentile.
2. Is price reduction unsustainable?
This measure calculates the earnings growth rate required to outperform bonds. This is calculated by adding up the readings of individual securities. This indicator is currently near the 60th percentile for the overall market, higher than some of our other readings. Profit growth discounted in stocks remains high.
Even more so in the US software sector. Analysts' earnings growth expectations for this sector have slowed, but remain high historically. P/Es have reversed COVID gains but remain high historical.
3. How many new buyers (i.e., non-existing buyers) entered the market?
Expansion of new entrants is often indicative of a bubble. According to historical accounts, this was true in the 1990s equity bubble and the 1929 bubble (though our data for this and other gauges doesn't go back that far). A flood of new retail investors into popular stocks, which by other measures appeared to be in a bubble, pushed this gauge above the 90% mark in 2020. The pace of retail activity in the markets has recently slowed to pre-COVID levels.
4. How Broadly Bullish Is Sentiment?
The more people who have invested, the less resources they have to keep investing, and the more likely they are to sell. Market sentiment is now significantly negative.
5. Are Purchases Being Financed by High Leverage?
Leveraged purchases weaken the buying foundation and expose it to forced selling in a downturn. The leverage gauge, which considers option positions as a form of leverage, is now around the 50% mark.
6. To What Extent Have Buyers Made Exceptionally Extended Forward Purchases?
Looking at future purchases can help assess whether expectations have become overly optimistic. This indicator is particularly useful in commodity and real estate markets, where forward purchases are most obvious. In the equity markets, I look at indicators like capital expenditure, or how much businesses (and governments) invest in infrastructure, factories, etc. It reflects whether businesses are projecting future demand growth. Like other gauges, this one is at the 40th percentile.
What one does with it is a tactical choice. While the reversal has been significant, future earnings discounting remains high historically. In either case, bubbles tend to overcorrect (sell off more than the fundamentals suggest) rather than simply deflate. But I wanted to share these updated readings with you in light of recent market activity.
Desiree Peralta
2 years ago
How to Use the 2023 Recession to Grow Your Wealth Exponentially
This season's three best money moves.
“Millionaires are made in recessions.” — Time Capital
We're in a serious downturn, whether or not we're in a recession.
97% of business owners are decreasing costs by more than 10%, and all markets are down 30%.
If you know what you're doing and analyze the markets correctly, this is your chance to become a millionaire.
In any recession, there are always excellent possibilities to seize. Real estate, crypto, stocks, enterprises, etc.
What you do with your money could influence your future riches.
This article analyzes the three key markets, their circumstances for 2023, and how to profit from them.
Ways to make money on the stock market.
If you're conservative like me, you should invest in an index fund. Most of these funds are down 10-30% of ATH:
In earlier recessions, most money index funds lost 20%. After this downturn, they grew and passed the ATH in subsequent months.
Now is the greatest moment to invest in index funds to grow your money in a low-risk approach and make 20%.
If you want to be risky but wise, pick companies that will get better next year but are struggling now.
Even while we can't be 100% confident of a company's future performance, we know some are strong and will have a fantastic year.
Microsoft (down 22%), JPMorgan Chase (15.6%), Amazon (45%), and Disney (33.8%).
These firms give dividends, so you can earn passively while you wait.
So I consider that a good strategy to make wealth in the current stock market is to create two portfolios: one based on index funds to earn 10% to 20% profit when the corrections end, and the other based on individual stocks of popular and strong companies to earn 20%-30% return and dividends while you wait.
How to profit from the downturn in the real estate industry.
With rising mortgage rates, it's the worst moment to buy a home if you don't want to be eaten by banks. In the U.S., interest rates are double what they were three years ago, so buying now looks foolish.
Due to these rates, property prices are falling, but that won't last long since individuals will take advantage.
According to historical data, now is the ideal moment to buy a house for the next five years and perhaps forever.
If you can buy a house, do it. You can refinance the interest at a lower rate with acceptable credit, but not the house price.
Take advantage of the housing market prices now because you won't find a decent deal when rates normalize.
How to profit from the cryptocurrency market.
This is the riskiest market to tackle right now, but it could offer the most opportunities if done appropriately.
The most powerful cryptocurrencies are down more than 60% from last year: $68,990 for BTC and $4,865 for ETH.
If you focus on those two coins, you can make 30%-60% without waiting for them to return to their ATH, and they're low enough to be a solid investment.
I don't encourage trying other altcoins because the crypto market is in crisis and you can lose everything if you're greedy.
Still, the main Cryptos are a good investment provided you store them in an external wallet and follow financial gurus' security advice.
Last thoughts
We can't anticipate a recession until it ends. We can't forecast a market or asset's lowest point, therefore waiting makes little sense.
If you want to develop your wealth, assess the money prospects on all the marketplaces and initiate long-term trades.
Many millionaires are made during recessions because they don't fear negative figures and use them to scale their money.
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Will Lockett
3 years ago
The World Will Change With MIT's New Battery
It's cheaper, faster charging, longer lasting, safer, and better for the environment.
Batteries are the future. Next-gen and planet-saving technology, including solar power and EVs, require batteries. As these smart technologies become more popular, we find that our batteries can't keep up. Lithium-ion batteries are expensive, slow to charge, big, fast to decay, flammable, and not environmentally friendly. MIT just created a new battery that eliminates all of these problems. So, is this the battery of the future? Or is there a catch?
When I say entirely new, I mean it. This battery employs no currently available materials. Its electrodes are constructed of aluminium and pure sulfur instead of lithium-complicated ion's metals and graphite. Its electrolyte is formed of molten chloro-aluminate salts, not an organic solution with lithium salts like lithium-ion batteries.
How does this change in materials help?
Aluminum, sulfur, and chloro-aluminate salts are abundant, easy to acquire, and cheap. This battery might be six times cheaper than a lithium-ion battery and use less hazardous mining. The world and our wallets will benefit.
But don’t go thinking this means it lacks performance.
This battery charged in under a minute in tests. At 25 degrees Celsius, the battery will charge 25 times slower than at 110 degrees Celsius. This is because the salt, which has a very low melting point, is in an ideal state at 110 degrees and can carry a charge incredibly quickly. Unlike lithium-ion, this battery self-heats when charging and discharging, therefore no external heating is needed.
Anyone who's seen a lithium-ion battery burst might be surprised. Unlike lithium-ion batteries, none of the components in this new battery can catch fire. Thus, high-temperature charging and discharging speeds pose no concern.
These batteries are long-lasting. Lithium-ion batteries don't last long, as any iPhone owner can attest. During charging, metal forms a dendrite on the electrode. This metal spike will keep growing until it reaches the other end of the battery, short-circuiting it. This is why phone batteries only last a few years and why electric car range decreases over time. This new battery's molten salt slows deposition, extending its life. This helps the environment and our wallets.
These batteries are also energy dense. Some lithium-ion batteries have 270 Wh/kg energy density (volume and mass). Aluminum-sulfur batteries could have 1392 Wh/kg, according to calculations. They'd be 5x more energy dense. Tesla's Model 3 battery would weigh 96 kg instead of 480 kg if this battery were used. This would improve the car's efficiency and handling.
These calculations were for batteries without molten salt electrolyte. Because they don't reflect the exact battery chemistry, they aren't a surefire prediction.
This battery seems great. It will take years, maybe decades, before it reaches the market and makes a difference. Right?
Nope. The project's scientists founded Avanti to develop and market this technology.
So we'll soon be driving cheap, durable, eco-friendly, lightweight, and ultra-safe EVs? Nope.
This battery must be kept hot to keep the salt molten; otherwise, it won't work and will expand and contract, causing damage. This issue could be solved by packs that can rapidly pre-heat, but that project is far off.
Rapid and constant charge-discharge cycles make these batteries ideal for solar farms, homes, and EV charging stations. The battery is constantly being charged or discharged, allowing it to self-heat and maintain an ideal temperature.
These batteries aren't as sexy as those making EVs faster, more efficient, and cheaper. Grid batteries are crucial to our net-zero transition because they allow us to use more low-carbon energy. As we move away from fossil fuels, we'll need millions of these batteries, so the fact that they're cheap, safe, long-lasting, and environmentally friendly will be huge. Who knows, maybe EVs will use this technology one day. MIT has created another world-changing technology.
Blake Montgomery
3 years ago
Explaining Twitter Files
Elon Musk, Matt Taibbi, the 'Twitter Files,' and Hunter Biden's laptop: what gives?
Explaining Twitter Files
Matt Taibbi released "The Twitter Files," a batch of emails sent by Twitter executives discussing the company's decision to stop an October 2020 New York Post story online.
What's on Twitter? New York Post and Fox News call them "bombshell" documents. Or, as a Post columnist admitted, are they "not the smoking gun"? Onward!
What started this?
The New York Post published an exclusive, potentially explosive story in October 2020: Biden's Secret Emails: Ukrainian executive thanks Hunter Biden for'meeting' veep dad. The story purported to report the contents of a laptop brought to the tabloid by a Delaware computer repair shop owner who said it belonged to President Biden's second son, Hunter Biden. Emails and files on the laptop allegedly showed how Hunter peddled influence with Ukranian businessmen and included a "raunchy 12-minute video" of Hunter smoking crack and having sex.
Twitter banned links to the Post story after it was published, calling it "hacked material." The Post's Twitter account was suspended for multiple days.
Why? Yoel Roth, Twitter's former head of trust and safety, said the company couldn't verify the story, implying they didn't trust the Post.
Twitter's stated purpose rarely includes verifying news stories. This seemed like intentional political interference. This story was hard to verify because the people who claimed to have found the laptop wouldn't give it to other newspapers. (Much of the story, including Hunter's business dealings in Ukraine and China, was later confirmed.)
Roth: "It looked like a hack and leak."
So what are the “Twitter Files?”
Twitter's decision to bury the story became a political scandal, and new CEO Elon Musk promised an explanation. The Twitter Files, named after Facebook leaks.
Musk promised exclusive details of "what really happened" with Hunter Biden late Friday afternoon. The tweet was punctuated with a popcorn emoji.
Explaining Twitter Files
Three hours later, journalist Matt Taibbi tweeted more than three dozen tweets based on internal Twitter documents that revealed "a Frankensteinian tale of a human-built mechanism grown out of its designer's control."
Musk sees this release as a way to shape Twitter's public perception and internal culture in his image. We don't know if the CEO gave Taibbi the documents. Musk hyped the document dump before and during publication, but Taibbi cited "internal sources."
Taibbi shares email screenshots showing Twitter execs discussing the Post story and blocking its distribution. Taibbi says the emails show Twitter's "extraordinary steps" to bury the story.
Twitter communications chief Brandon Borrman has the most damning quote in the Files. Can we say this is policy? The story seemed unbelievable. It seemed like a hack... or not? Could Twitter, which ex-CEO Dick Costolo called "the free speech wing of the free speech party," censor a news story?
Many on the right say the Twitter Files prove the company acted at the behest of Democrats. Both parties had these tools, writes Taibbi. In 2020, both the Trump White House and Biden campaign made requests. He says the system for reporting tweets for deletion is unbalanced because Twitter employees' political donations favor Democrats. Perhaps. These donations may have helped Democrats connect with Twitter staff, but it's also possible they didn't. No emails in Taibbi's cache show these alleged illicit relations or any actions Twitter employees took as a result.
Even Musk's supporters were surprised by the drop. Miranda Devine of the New York Post told Tucker Carlson the documents weren't "the smoking gun we'd hoped for." Sebastian Gorka said on Truth Social, "So far, I'm deeply underwhelmed." DC Democrats collude with Palo Alto Democrats. Whoop!” The Washington Free Beacon's Joe Simonson said the Twitter files are "underwhelming." Twitter was staffed by Democrats who did their bidding. (Why?)
If "The Twitter Files" matter, why?
These emails led Twitter to suppress the Hunter Biden laptop story has real news value. It's rare for a large and valuable company like Twitter to address wrongdoing so thoroughly. Emails resemble FOIA documents. They describe internal drama at a company with government-level power. Katie Notopoulos tweeted, "Any news outlet would've loved this scoop!" It's not a'scandal' as teased."
Twitter's new owner calls it "the de facto public town square," implying public accountability. Like a government agency. Though it's exciting to receive once-hidden documents in response to a FOIA, they may be boring and tell you nothing new. Like Twitter files. We learned how Twitter blocked the Post's story, but not why. Before these documents were released, we knew Twitter had suppressed the story and who was involved.
These people were disciplined and left Twitter. Musk fired Vijaya Gadde, the former CLO who reportedly played a "key role" in the decision. Roth quit over Musk's "dictatorship." Musk arrived after Borrman left. Jack Dorsey, then-CEO, has left. Did those who digitally quarantined the Post's story favor Joe Biden and the Democrats? Republican Party opposition and Trump hatred? New York Post distaste? According to our documents, no. Was there political and press interference? True. We knew.
Taibbi interviewed anonymous ex-Twitter employees about the decision; all expressed shock and outrage. One source said, "Everyone knew this was fucked." Since Taibbi doesn't quote that expletive, we can assume the leaked emails contained few or no sensational quotes. These executives said little to support nefarious claims.
Outlets more invested in the Hunter Biden story than Gizmodo seem vexed by the release and muted headlines. The New York Post, which has never shied away from a blaring headline in its 221-year history, owns the story of Hunter Biden's laptop. Two Friday-night Post alerts about Musk's actions were restrained. Elon Musk will drop Twitter files on NY Post-Hunter Biden laptop censorship today. Elon Musk's Twitter dropped Post censorship details from Biden's laptop. Fox News' Apple News push alert read, "Elon Musk drops Twitter censorship documents."
Bombshell, bombshell, bombshell… what, exactly, is the bombshell? Maybe we've heard this story too much and are missing the big picture. Maybe these documents detail a well-documented decision.
The Post explains why on its website. "Hunter Biden laptop bombshell: Twitter invented reason to censor Post's reporting," its headline says.
Twitter's ad hoc decision to moderate a tabloid's content is not surprising. The social network had done this for years as it battled toxic users—violent white nationalists, virulent transphobes, harassers and bullies of all political stripes, etc. No matter how much Musk crows, the company never had content moderation under control. Buzzfeed's 2016 investigation showed how Twitter has struggled with abusive posters since 2006. Jack Dorsey and his executives improvised, like Musk.
Did the US government interfere with the ex-social VP's media company? That's shocking, a bombshell. Musk said Friday, "Twitter suppressing free speech by itself is not a 1st amendment violation, but acting under government orders with no judicial review is." Indeed! Taibbi believed this. August 2022: "The laptop is secondary." Zeynep Tufecki, a Columbia professor and New York Times columnist, says the FBI is cutting true story distribution. Taibbi retracted the claim Friday night: "I've seen no evidence of government involvement in the laptop story."
What’s the bottom line?
I'm still not sure what's at stake in the Hunter Biden scandal after dozens of New York Post articles, hundreds of hours of Fox News airtime, and thousands of tweets. Briefly: Joe Biden's son left his laptop with a questionable repairman. FBI confiscated it? The repairman made a copy and gave it to Rudy Giuliani's lawyer. The Post got it from Steve Bannon. On that laptop were videos of Hunter Biden smoking crack, cavorting with prostitutes, and emails about introducing his father to a Ukrainian businessman for $50,000 a month. Joe Biden urged Ukraine to fire a prosecutor investigating the company. What? The story seems to be about Biden family business dealings, right?
The discussion has moved past that point anyway. Now, the story is the censorship of it. Adrienne Rich wrote in "Diving Into the Wreck" that she came for "the wreck and not the story of the wreck" No matter how far we go, Hunter Biden's laptop is done. Now, the crash's story matters.
I'm dizzy. Katherine Miller of BuzzFeed wrote, "I know who I believe, and you probably do, too. To believe one is to disbelieve the other, which implicates us in the decision; we're stuck." I'm stuck. Hunter Biden's laptop is a political fabrication. You choose. I've decided.
This could change. Twitter Files drama continues. Taibbi said, "Much more to come." I'm dizzy.
Kaitlin Fritz
3 years ago
The Entrepreneurial Chicken and Egg
University entrepreneurship is like a Willy Wonka Factory of ideas. Classes, roommates, discussions, and the cafeteria all inspire new ideas. I've seen people establish a business without knowing its roots.
Chicken or egg? On my mind: I've asked university founders around the world whether the problem or solution came first.
The Problem
One African team I met started with the “instant noodles” problem in their academic ecosystem. Many of us have had money issues in college, which may have led to poor nutritional choices.
Many university students in a war-torn country ate quick noodles or pasta for dinner.
Noodles required heat, water, and preparation in the boarding house. Unreliable power from one hot plate per blue moon. What's healthier, easier, and tastier than sodium-filled instant pots?
BOOM. They were fixing that. East African kids need affordable, nutritious food.
This is a real difficulty the founders faced every day with hundreds of comrades.
This sparked their serendipitous entrepreneurial journey and became their business's cornerstone.
The Solution
I asked a UK team about their company idea. They said the solution fascinated them.
The crew was fiddling with social media algorithms. Why are some people more popular? They were studying platforms and social networks, which offered a way for them.
Solving a problem? Yes. Long nights of university research lead them to it. Is this like world hunger? Social media influencers confront this difficulty regularly.
It made me ponder something. Is there a correct response?
In my heart, yes, but in my head…maybe?
I believe you should lead with empathy and embrace the problem, not the solution. Big or small, businesses should solve problems. This should be your focus. This is especially true when building a social company with an audience in mind.
Philosophically, invention and innovation are occasionally accidental. Also not penalized. Think about bugs and the creation of Velcro, or the inception of Teflon. They tackle difficulties we overlook. The route to the problem may look different, but there is a path there.
There's no golden ticket to the Chicken-Egg debate, but I'll keep looking this summer.