Because most philosophies that frown on reproduction don't survive.

Thursday, March 27, 2025

AI Art is the Insincerest form of Flattery?

What feats would humanity achieve if it networked together the largest amount of computing power in history? 



Found on Twitter

A day or two ago I suddenly noticed a ton of memes re-done in a Studio Ghibli style, and I figured some new AI tool was to blame.  Sure enough, this turns out to be the result of a new feature put out by OpenAI's image generation tool.

It apparently hit the right spot of images people will enjoy enough for half a second to hit share or like, and so they exploded all over social media.  Someone even put what must have been many hours and some actual money into redoing the Fellowship of the Ring movie trailer, shot for shot, in this AI generated Ghibli-style.

A number of people were also pretty angry about it, pointing out that Ghibli's hand drawn animation style is one of the few artistic bright spots in a movie landscape over the last 20 years increasingly dominated by formulaic and CGI fare.

It seems to me this actually underscores the sense in which "AI art" is different from what humans can do.  After all, the way that this type of AI works is it ingests a huge number of examples of something, whether that is writing on various topics or images, and then on command it puts together elements which it associates with the request.

So in respect to images, what AI can do pretty easily is put together elements that are commonly found and easily identified.  I pretty commonly use AI generated images to illustrate my pricing substack posts.  If I didn't have that option, I'd be using free stock photos, and the only reason I illustrate the posts at all is because LinkedIn and Facebook are show a post a lot less if it doesn't have an image.  But one of the things I've found in generating those images is that AI really is only good at combining very simple existing concepts.  So, if you ask it to show a Starbucks cup of coffee sitting on a counter, it can do pretty well.  If you ask it to show a traffic light with a dollar sign imposed on each colored lens of the light, it's a little shaky. Ask for an airliner leaving a jet trail made of dollar signs and it completely fall apart.

This is why trends like these Ghibli style images underline now the replicability or artists but how much they are needed.  AI can rip off Ghibli's style because it already exists.  But AI is not able to generate a new style.

And indeed, something like the AI Ghibli Fellowship of the Rings trailer attempt just ends up underscoring how little this is like anything Ghibli would do. After all, Peter Jackson films have their own visual palette, whether done moderately well as in Fellowship or with utter silliness like in the Hobbit movies.  Ghibli has a whole different design ethic. The Ghibli movie of Wizard of Earthsea (not one of their best efforts, honestly) underlines that Ghibli is not just a drawing style, it's an entire approach to visual imagination. That AI Fellowship trailer is not how a Ghibli LotR movie would look, because Ghibli does not imagine the way that Peter Jackson does.

To be honest, I think this is something that most people who consume images (whether on their phones or in the movie theater) don't consciously think about. For a lot of people, seeing a Ghibli style image results in a quick "Oh Cool!" reaction, and they move on.

That's a bit unfortunate, but probably pretty universally how things have been. Most people do not think deeply about how the things they enjoy seeing come into being.

But underneath, the thing that draws people into a piece of art for more than a half second is that it has some originality. Indeed, real originality of vision is special enough that even copies of it can fascinate at least a little bit.

You can't have derivatives without originals.

And similarly, if you don't have original writing and original images (both art and photos) you can't generate these probability-based AI blends which put together several concepts and produce some new thing which draws on various sources but doesn't truly create.

This means that AI image generation is necessarily pretty ephemeral, and if you want anything with real creativity or quality of vision, you need to have a human create it for you. So, for instance, while I use throw-away AI images to illustrate posts so they'll show up on social media, when I wanted a logo for Pricing Evolution I went to two different artists and commissioned original drawings. Both, I think, ended up having a personality which you would not get at all from AI, because they're originally created by humans.



In the realm of writing, I've heard several writers joke that they're now "writing for AI". The sense in which they mean this is that while AI is very useful at searching the wide world of writings available on some particular topic and putting all of that information together, what AI is not able to do is provide original insights and research. So they mean that they are focusing on writing original work, the sort of thing which will be synthesized and summarized and linked to even as the swarm of bots continues to serve up information to people.

And I think similarly, when it comes to any kind of art, original styles and creations will continue to come from humans, even as AI allows people to throw up quick imitations or fusions which hold the eye for a moment. 

Without humans, there would be nothing to imitate.

Thursday, March 13, 2025

π with Jesus

Enjoy our annual repost of 2017's π with Jesus, and eat yer pie tomorrow. 

It's the second week of Lent, which means that observance has lost its zest. I don't know about you, but I'm yearning for a bit of chocolate. Not a bright, hopeful yearning; a dry, intellectual, arid yearning, because I know I'm not going to eat chocolate anyway. I just want it because it's better than not-chocolate.

So we search for a reason to celebrate, and not the corny-beef celebration of St. Patrick's Day dispensations (which St. Patrick would have disdained) but something rounder, to bring us full circle. And lo! It is Pi Day, 3.14. But we cannot fudge on Pi Day without bringing it into some greater religious context. And not just the context of "God made it, and it is good," because God made chocolate too, and we're not eating that.

Of course, the key question is: would Jesus have known about Pi? Not known-known as God knows all things, but as a person growing up in a first-century Jewish culture, in the course of his human knowledge would he have been likely to encounter the concept of Pi?

Dr. Google offers us thoughts on "mathematics in ancient Israel pi", presenting The Secret Jewish History of Pi:
The relationship between a circle’s diameter — a line running straight through cutting it into two equal halves — and its circumference — the distance around the circle – was originally mentioned in the Hebrew Book of Kings in reference to a ritual pool in King Solomon’s Temple. The relevant verse (1 Kings 7:23) states that the diameter of the pool was ten cubits and the circumference 30 cubits. In other words, the Bible rounds off Pi to about three, as if to say that’s good enough for horseshoes and swimming pools. 
Later on, the rabbis of the Mishnah and the Talmud, who knew that the one-third ratio wasn’t completely accurate, had a field day with the Bible having played fast and loose with the facts, arguing in their characteristic manner that of course it depended on whether you measured the pool from the inside or the outside of the vessel’s wall. They also had fun with some of the Gematria – the numerical value – of the words in the original passage, which when you play around with them a bit indeed come a lot closer to the value of Pi, spelling it out to several decimal points.
"Secret" here might be a bit sensationalistic, seeing as 1Kings is not exactly an occult piece of literature. The Journal of Mathematics and Culture May 2006, V1(1) offers us a more scholarly explanation via Lawrence Mark Lesser's article "Book of Numbers: Exploring Jewish Mathematics and Culture at a Jewish High School":
A value of π can be obtained from I Kings 7:23: 
“He made the ‘sea’ of cast [metal] ten cubits from its one lip to its [other] lip, circular all around, five cubits its height; a thirty-cubit line could encircle it all around.” 
It appears the value of π implied here is simply 30/10 (an error of 4.5%) until a student asks if we need to consider the tank’s thickness -- given three verses later as one-handbreadth, so the inner diameter is 10 cubits minus 2 handbreadths. (Of course, this is also a chance to discuss issues of measurement!) Using the Talmudic value of 1/6 cubit for one handbreadth, the inner diameter becomes 9 2/3 cubits and dividing 30 by 9 2/3 yields more accuracy (error: 1.2%). Applying a more subtle and technical approach to I Kings 7:23 (see Posamentier & Lehmann 2004 or 20 Tsaban & Garber 1998), the ratio of gematrias for the written and spoken forms of a key Hebrew word (for “line”) in that verse is 111/106, which when multiplied by 3 yields a very refined approximation for π : 333/106 (error: 0.0026%). Very few words in the Torah have different oral and written forms. 
By Jewish Encyclopedia [Public domain or Public domain]


Jesus was well versed in the law and the prophets, and it is not a stretch to assume that the account of the building of Solomon's Temple and the fashioning of the great pillars and vessels of bronze was known to him. Could he have known about pi? Could he? Should we doubt his scriptural knowledge? Listen to this.
After three days they found him in the temple, sitting in the midst of the teachers, listening to them and asking them questions, and all who heard him were astounded at his understanding and his answers. When his parents saw him, they were astonished, and his mother said to him, “Son, why have you done this to us? Your father and I have been looking for you with great anxiety.” And he said to them, “Why were you looking for me? Did you not know that I must be in my Father’s house?” But they did not understand what he said to them. (Luke 2:46-50)
Do you not understand? Jesus, in the Temple itself, astounding the teachers with his knowledge and his answers, and talking of his Father's house -- the very house for which the bronze vessel was created*? Even his parents could not understand Pi, as happens with so many parents dealing with their children's math.

My friends. The Scriptures themselves proclaim Pi. Take and eat.

*Not actually the very house, since it was destroyed by the Babylonians in 586 BC, and not the very basin, since 2 Kings tells us that the Chaldeans destroyed it. But still.

Monday, March 03, 2025

Some Real Foreign Policy Realism

If there's a theme to the second Trump administration, it's when after a question and answer session with Ukrainian President Zelensky and the press which went spectacularly off the rails Trump turned to the cameras and said, "This is going to make great television." If the attention economy were real dollars, Trump might stand some real chance of balancing the budget with all his extra clicks and eyeballs.

Having watched the entire 50 minutes of the Zelensky Q&A in the Oval Office, and then Zelensky's subsequent 20 minutes Fox News interview, I think it's worth taking a step back here and examining what really happened and why. There's a great deal of spin coming out of various sides, but with a bit of time and context it's not hard to see the different things going on.

First, it's important to set the stage, because there have been a lot of claims flying around.

When Russia invaded Ukraine on Feb. 24, 2022, the expectation was that Ukraine would be quickly overwhelmed by Russia's larger army.  However, rather than collapsing into chaos, the Ukrainian government and military pulled itself together and put up an organized resistance while Russian attacks bogged down amid poor logistics, including tank columns that ran out of gas and provided sitting-duck targets for Ukrainian drones and anti-tank missiles.

Ukraine completely pushed out Russian incursions from the north, both the decapitation stab towards Kyiv and the Russian advance towards Kharkiv.  However, Russia was successful in occupying the southeastern portions of the country, establishing a land corridor to the Crimean Peninsula which Russia had occupied back in 2014.

Current state of war in Ukraine from Institute of War map:
Blue areas are those re-captured by Ukraine while red areas are those occupied by Russi
a

There was a period of optimism among some Ukraine supporters during this period of pushing the Russians back in the north that it would be possible for Ukraine, with the support of military hardware from the West, to full reclaim their territory from Russia.  This remains Ukraine's stated war aim, but for two years now things have remained bogged down in mostly static positional warfare which is reminiscent of World War One, with entrenched positions and heavy use of artillery.

Throughout this time, Ukraine has received financial and military aid from the US, Europe, and other countries. The US is the largest single supporter, though the total aid from the EU is greater than that from the US.  Other countries aside from the US and EU have also contributed, including $29B from the UK (which is no longer a member of the EU), $18M from Japan, and $13B from Canada. (source)


President Trump has stated repeatedly that he believes the war would never have happened if he had been president in 2022, and he has expressed ambitions to end the war through negotiations quickly. Vice President Vance has famously said that he "doesn't care" about Ukraine and has been at pains to reinforce that impression whenever he's given the chance.

With all that said, let's look at where things stand in the wake of the disastrous White House meeting between Trump and Zelensky, which ended with Trump and Vance berating Zelensky in response to what they described as disrespect from him.

About that meeting

The press Q&A with Zelensky and Trump was 50 minutes long, and during the first 40 minutes it was relatively cordial though it was clear that there were repeatedly stated areas of difference.

During that first period, Trump indicated repeatedly (with his usual self-congratulation) that he saw himself as a neutral intermediary, making peace between Putin and Zelensky.  This created a clear difference of opinion, as Zelensky stated repeatedly that he hoped to see the US stand with Ukraine against Russia and its aggression.

The purpose of the day was to sign a mineral deal which would grant the United States rights to develop "rare earth" mineral deposits in Ukraine. There did not seem to be much disagreement about that.  Indeed, Zelensky did not seem particularly concerned about the rate earths deal one way or the other.  However, Zelensky kept coming back to the point that if Ukraine was to agree to a peace, it would have to involve security guarantees from the US as well as Europe, because Putin has repeatedly broken past agreements he signed with Ukraine.

In other words, Zelensky was using the opportunity of this public event to establish his negotiating position for the upcoming peace talks in which Trump wants to broker a deal between Ukraine and Russia.

Trump and particularly Vance clearly tired of this, and so around 40 minutes into the meeting, first Vance and then Trump aggressively turned on Zelensky and delivered a rhetorical beat-down which filled the remainder of the meeting. It's this beat-down which has generated the clips and quotes which have been so much discussed.

I think civilized people will generally agree that Trump's and Vance's behavior was poor, and their fans will think it was bracing. To an extent, those preferences as so much determined by taste as not to be particularly interesting.

A more important question is perhaps whether Zelensky was wise to attempt both to emphasize Ukraine's position in regards to upcoming peace talks (that they are only willing to stop fighting if there are some guarantees this isn't just a way to have the Ukrainians stand down so the Russians can stage a surprise attack at their leisure) and also to repeat the basic truth that Russia is the aggressor in this war and has repeatedly violated agreements for more than ten years.

I think it's reasonable to think that, given the relative positions of Ukraine and the US, it was not actually wise to use an occasion such as this as a chance to state his negotiating position and the accurate history of recent events in that part of the world.

I'm not adamant that it was unwise, but I can see why one might argue that this wasn't the time to make clear what the sticking points in the next round of negotiations would be.

On the other hand, there's reasonable question as to whether getting through this mineral deal without drama would actually be any benefit if Trump continued in his belief that he could steamroll Ukraine into signing a ceasefire without guarantees.

A situation in which the US wants to stop providing aid to Ukraine is necessarily a pretty poor situation for Ukraine, which despite the justice of their cause is low on resources compared to Russia (and far more so compared to the US and even Western European countries.) So all of this ends up being a question of how Ukraine should best navigate a situation which is genuinely bad for them.

How can things end?

All of that said, I think it's important to take a realistic look at how the war in Ukraine could proceed from here regardless.

Predictions about the future are, of course, difficult. That said, some things seem fairly clear.

While both Russia and Ukraine have lost a lot of men (Russia, to all appearances, a lot more than Ukraine, but they also have 3.5x the population) neither one seems likely to experience a collapse which allows the other to roll forward. It's possible, but three years in there are few signs that such a collapse is coming soon on either side.

Russia has more military hardware to apply, in particular more artillery shells, but they are also using it at 10x the rate and still producing fairly little to show for that extra expenditure. This is very much a WW1 style war, with all the complaints about gains best measured in yards applying at least as well here as they did in the Great War.

This means that Russia is very unlikely to achieve their original goal of either completely absorbing Ukraine or turning it into a demilitarized satellite state ruled by a puppet regime. It seems pretty clear at this point that Russia simply does not have the military power to make that happen without a complete breakdown in Ukrainian will to fight.

At the same time, the Ukrainian war aim of regaining all of the territory which Russia has captured since Feb 2022 is similarly unrealistic. Given Ukrainian manpower and abilities that we've seen over the last three years, it seems clear that this would only be able to happen if there was a major deployment of European and probably also US airpower and perhaps also ground troops.

There are very good reasons why the US and Europe are hesitant to do this.  Not just cowardice (though in some cases, I think this honestly is a factor) but also the fact that despite the fact Russia is clearly no longer a conventional great power, it still has a great power nuclear arsenal. No one really wants to corner the great bear to the point where it might start doing desperate things.

As someone who despises Putinism and admires the underdog courage which Ukraine has shown in a very bad spot, I wish this were not the case, but I think that in all realism we have to admit that it is. The conquered territory is not coming back to Ukraine any time soon. This is bad for the people who are suffering under Russian occupation.  Not only have they kidnapped thousands of children to Russian-ize them and assassinated or imprisoned many innocent people, but Russia has also used the men from the territories they have declared to be Russian as cannon fodder in the war.  And the Russian way of war requires a lot of cannon fodder.

But this is the simple truth which Ukraine supporters are often too hesitant to admit: Ukraine is not one additional weapons system away from being able to push Russia out.  They are either 40-80 million population or 10 more years of military development along Western lines away from being able to push Russia out.  

Poland is of similar population to Ukraine and probably could deal with a Russian invasion pretty well, but they were not nearly as close to the black hole of post-USSR collapse as Ukraine was, and they have 20 years of close collaboration with the US in Iraq and Afghanistan behind them to hone their military.

So the truth is, the kind of peace which Ukraine could get is probably not much better than what Trump is offering. However, because that would leave Ukraine vulnerable to Russia simply invading again (as they did in 2022 after the 2014 invasion of Crimea and the Donbas, and the peace agreements after that) Ukraine naturally would rather not put down their weapons without either foreign military commitments of support or very, very significant commitments of weapons which would allow them to be significantly more ready should Russia re-start the war.

However, it's understandable that absent those kinds of guarantees, Ukraine is hesitant to stand down. While loss aversion is not a strategy, it is very hard to stop fighting a war in which you have lost so much both without gaining your aims and also without some kind of guarantee that it won't simply start up again soon under even less favorable circumstances. It's arguably that faced with a neutral ceasefire with no arms and no security backing, Ukraine is honestly better off continuing to fight.  Yes, they're continuing to lose men, but then, so did Afghanistan when faced with Russia, or later faced with the US, and who is in control there now?

Where is Europe?

One of the obvious questions in all this is: why does all this come down to the US?

Trump's actions in all this do not strike me as reasonable or honorable, but it does not have to be the case that the US is the only country capable of backing Ukraine to resist as long as they choose to do so, or the only country capable of forcing Russia to the negotiating table.

After all, the UK and France are both full nuclear armed powers with second strike capabilities. And while the total GDP of Europe is not as large as that of the US, they certainly have the economic and manufacturing resources to be enough of a military power to overwhelmingly outclass Russia if they chose to do so.

Moreover, this is not a problem which has come up overnight. Europe has had a whole three years of knowing that the US was one election away from disengaging from Ukraine, and they could have done a lot to ramp up military production and readiness during that time.

It is, quite frankly, disgraceful that Europe has not stepped up in the last three years.  They should have been scrambling as fast as they could to make themselves energy independent from the fossil fuels that Russia exports.  And they should have been ramping up their recruiting and their armaments manufacturing industries. Instead, despite some admirable spending, they have mostly ramped up their rhetoric.

It would, as of this moment, take Europe a while to step up to the plate and support Ukraine militarily independent of the US.  But they should not have waited till now to have made themselves ready to do that.

Perhaps they will now pull themselves together. The natural result of the Trumpian desire to pull back from being the world's superpower is that regional powers will have more space to rise.  I do not think that will, on the balance, be a good thing.  But Europe is the sort of power one might not mind having more strength, and they keep refusing to do it.  It's not an excuse for what Trump has done, but they too are actors and they should have acted better.

Sunday, February 23, 2025

Troll-y Problem

 The early days of the second Trump administration are as muddled as they are fast moving, and much of the reporting is being done by people who have strong feelings about the matter and thus a tendency to run with what's "too good to check" even if they're not consciously shading the truth.

That said, there are a few things which are clear and are in keeping with what we've known about the inner Trump set for quite some time. And one of those is that a number of notable characters on the Trump train are attached to a very online sort of argumentation.

The approach is: If they accuse us of being horrible in some particular way, we'll troll them by making jokes about whatever it is they accuse us of.

The problem is, this means that when the left invariably calls everyone on the right a racist, this type of discourse results in folks on the right tossing around racist terms or symbols to be "ironic" and make fun of the left

Or as we saw this week, after the left beclowned itself by insisting that they'd caught Elon Musk making a Nazi salute when giving a speech, Steve Bannon decided to intentionally throw a half hearted Nazi salute while giving a speech at CPAC just to show...  what exactly?


The thing is, throwing Nazi salutes or posting racist memes is just plain wrong. It doesn't matter if the point is to be "ironic" or mock the other side. It's something you shouldn't be doing regardless of the reason.

I understand how we got here.

For one thing, when the GOP nominated centrist Republicans like George W Bush, John McCain, and Mitt Romney, the left called all of them Nazis and racists.

For another, the left used its cultural power to play stupid games where it declared things offensive simply in order to go after conservatives. For instance, when Justice Amy Coney Barrett used the term "sexual preference" to refer to...  groups that define themselves by what sort of person they are sexually attracted to, not only did the media (which had happily used the term in the past) suddenly announce it was offensive, but several dictionary websites re-wrote their definitions of the phrase in real time to define it as pejorative.

And finally, there is the problem that for decades the elite class of the GOP has been significantly to the left of the base, particularly on cultural issues.  So when it came to things ranging from abortion and gay marriage to trans issues, in a lot of cases the professional Republicans who would actually work in congressional offices and the White House actually agreed with the left rather than the right.  And so when the GOP got in power, they never really did much to roll back social liberalism.

And then along came Donald Trump, who has all the rhetorical courtesy of a Sherman Tank, and unlike previous GOP nominees, he won.

Nothing empowers like victory, and so the people who had been pursuing the "let's be loud jerks to rub the left's nose in how wrong they are" approach looked like they were right.

I am not expert on what is politically expedient or popular, but I do know this: being a loud jerk is not a virtue, whether on the right or the left.  Doing things that are wrong isn't somehow better because you're making a point in the process, or owning the other side, or showing them how it feels to be on the receiving end.

I am very grateful that this administration has done basic sane things like acknowledged that there are only two genders and that boys should not be competing on girls sports teams.  But I would feel even more enthusiastic if this work was being done without all the bozo behavior that's come with it. After all, we want people to understand that our views are right, not that they're some form of madness imposed by bozos.

Saturday, February 15, 2025

Parenting as the Crossroads of Lives

The early impression of parenthood is that it is comprised of always being on duty to keep small humans alive, fed, and moderately clean. As the kids get a bit older, transportation duties are added to this.

And to be fair, there is an awful lot of this.

But as the older kids move into adulthood, I think a deeper sense of what parenthood it comes into view.

A typical evening lately might range from taking one or two younger kids to activities, cooking and serving a dinner for 7-10, trying to get the youngest two kids engaged in something other than begging for screentime, hearing about the activities or workday of teens, getting those kids not yet old enough to put themselves to bed to head upstairs at a reasonable time, discussing some financial or personal issue with one of the adult kids, and Mom and Dad trying to somehow get a little time together as a couple.

When the kids were younger, everything moved more as one family machine: get everyone up, make sure everyone eats breakfast, have everyone do schoolwork, take everyone to activities.

The younger end of our distribution is more spread out: 7, 11, 14, 16 -- all different stages of life and development -- and among the adults, despite the closer spacing there is working-before-college, college, and post-college.  

The result is that it is more than ever apparent that our duties as parents do not consist of moving around an amorphous blob of children.  Rather, we sit at the intersection of many lives.

Some need guidance and help in their fledgling adult lives.

Some are working through those last years of semi-dependence before becoming adults.

And some still have many years of growth ahead before they will be stepping off to lead their own lives.

But all of them are separate human lives, bound inextricably to ours through our shared family, yet by tethers which become longer and more flexible with time.  Eventually -- indeed, not so very far away -- they will begin to form their own families, even as they also remain part of ours.  

I'm tempted to make some sort of astronomical analogy, but although multi-star systems can have planets, they tend not to be stable.  Perhaps that's some indication of how each new family needs the distance to be self containing, even while remaining part of the larger system. After all, gravitational pull reduces according to the square of the distance.

But this sense of living at the crossroads of many different lives has been the dominant one in parenthood for the last year or two.

Saturday, February 01, 2025

Ordo Amoris is not the point

Vice President JD Vance has been out using terminology from Catholic theology to defend the specific policies and tactics which the Trump administration has been adopting around immigration, and so there was a brief burst of discussion a couple days ago about the idea of the Ordo Amoris, the order of loves.

You can hear him speak here, but if like me you'd always rather read a transcript, here's the relevant bit:

But there's this old-school, and I think it's a very Christian concept, by the way, that you love your family, and then you love your neighbor, and then you love your community, and then you love your fellow citizens in your own country, and then after that, you can focus and prioritize the rest of the world. A lot of the far left has completely inverted that. They seem to hate the citizens of their own country and care more about people outside their own borders. That is no way to run a society. I think the profound difference that Donald Trump brings the leadership of this country is the simple concept, America first. It doesn't mean you hate anybody else. It means that you have leadership. And President Trump has been very clear about this that puts the interests of American citizens first. In the same way that the British Prime Minister should care about Brits and the French should care about the French, we have an American President who cares primarily about Americans, and that's a very welcome change.

This quickly resulted in a firestorm, with all sorts of people calling Vance out as not understanding Christianity.  He tweeted back at them:


Pretty quickly lots of people were lining up to argue about whether Christianity taught that you were supposed to love strangers more or family more.

The problem is: none of this is actually apropos of the actual things that inspired this argument.

I think just about anyone would agree that if a father failed to feed his own children, because he was sending all his money off to feed the poor somewhere else, he would be failing in his duties as a father.  

However, the fact that one has the most urgent duty to provide for one's own family and friends and community does not mean that it doesn't matter what attitude you take towards those further away, or what political policies you endorse in regards to their treatment.

It's also worth considering what exactly a nearby need is.  If there is someone who is originally from another country who is in want in your particular parish or town, isn't that person's need arguably more proximate to you than people in some other state?  The idea of "America first", taken in certain ways, could suggest that we have a closer tie with some unknown person on the other side of the continent who is an American citizen over someone we work with or live next door to who is not.

One thing Vance has become very adept at is turning a policy question into what sounds like a moral balance of absolutely.  He famously said as a senator that he didn't care about Ukrainians, and when asked why said it was because his duty was to the people of Ohio.

But of course, it's not a question whether we should care about Ukraine OR the people of our home state. One can easily care to some extent about both. And even if one cares more about local needs than international needs, that doesn't mean that one cannot do anything to help those abroad.

Following that example, total US aid to Ukraine over the three years of war has been $113 billion.  That's a lot, until you consider the US government spends $6.8 trillion annually.  Ukraine aid has constituted roughly 0.5% of federal spending over the last three years. 

Maybe there should be no Ukraine aid at all, maybe it's not a good cause or one the US should be involved in, but if so that needs to be discussed on its own terms.  It's not sufficient to say, "Local concerns are higher priority, therefore we can't spend a cent on this particular non-local thing."

Likewise with any number of other issues.

Pointing out that we're called by Jesus to love everyone does not end arguments about enacting some particular policy, and neither does pointing out that we have the greatest duty to those nearest to us and thus most dependent on our personal help. Those are both important principals to recall when making any decisions about policy, but the policies have to be evaluated and chosen based upon themselves and the necessary trade-offs which implementing them would require.  

Friday, January 31, 2025

Trying to Lift Off

 


As I wrapped up my 2024 reading, I read a pair of books about SpaceX:  Liftoff: Elon Musk and the Desperate Early Days That Launched SpaceX and its sequel Reentry: SpaceX, Elon Musk, and the Reusable Rockets that Launched a Second Space Age

On the one hand, as someone who grew up in and around a planetarium, and who has always been fascinating by space flight, these are great for the sheer joy of seeing it all happen again. There was a PBS documentary from 1985 entitled Spaceflight, narrated by Martin Sheen, which I watched as a kid till the VHS tape wore out.  I have never grown out of that fascination.  

I've watched my share of SpaceX launches, but reading the detailed account of the scrappy, high speed fashion in which the company and their rockets were built is fascinating, inspiring, and reminds me of some of the things that I've been discovering as I work closer to fully launching my own business (not going to Mars, just helping people improve their prices and lower their costs.)

Something I heard a company founder say recently in an interview was, "The rules are made up, and no one knows what they are doing."

The higher up I get in business, the more this strikes me as true. But also, the thing that strikes me is: Just doing the basics right is very, very hard. Most of the time, most companies, are not hitting all the basics. On the one hand, it seems like companies should be able to do that and more.  And yet, I look around the office and how often people come into meetings and say, "Oh, yeah, sorry, I didn't send that email."  "I didn't have time to do that."  "We didn't check to see if that worked."

Just doing all the basics right will put you ahead of a lot of people.  So many teams get bogged down in endless cycles and approach their goals like the sprinter in Zeno's Paradox.

And on the other side, if you're truly driven, you can do a lot of things wrong and still move faster and be more successful than most.

That latter situation is what seemed often to be at play in the books about SpaceX. As we've all had reason to see, Elon Musk can be chaotic and drive so fast as to skip steps.  And yet, reading these books (and having read Walter Isaacson's lengthy biography of Musk a year ago) it's clear that he both has an ability to instill a tremendous inspiration and urgency towards a goal, and to do an almost superhuman job of hiring the right people for critical roles.

SpaceX routinely burns those right people out.  And yet it continues to make progress towards its goals in ways that few organizations do. It seems fully believable that if he doesn't get distracted with Twitter fights and dabbling in government, Musk will get humans to Mars 20 to 50 years sooner than might otherwise have been the case.

Meanwhile at my last two day jobs I can see the contrast between a company in which the CEO was able to inspire people with a vision and drive, despite himself being an utter chaos monkey who often sabotaged his own efforts, and a company with a CEO who is genuinely good at leading projects and yet who is not good at the inspire-the-room thing it takes to keep people moving at speed through significant change.

Leading people is hard -- and hard to define. The more I think about starting an organization in which I hope myself to lead people, the less sure I feel about whether I have the indefinable skills or instincts it takes to provide that leadership. A lot of company founders can get things done but will never be able to inspire people to excel, and so they will either never grow big or if big will move ponderously along tapped within the habits of consensus.

And then other people, with some combination of imagination and drive and willingness to put the objective above the individuals, are very, very good at moving an organization forward at speed.

Don't worry, the SpaceX books are honestly all about rockets, with few meditations on these vague questions of leadership. If you like rockets, you'll like those books.

But this -- combined with the Isaacson biography of Steve Jobs which I also read recently -- have very much set me thinking about how flawed some very effective leaders are, and how many nice people are not effective leaders.

Monday, January 06, 2025

Ringing in the New Year with Darwiniana!

 This weekend, our daughter Julia, the second of the Darwin offspring, got engaged to a delightful young man whom we love as a son. This is a moment of pure joy, untainted by internal reservations or fears. Lots of photos were taken -- not by me; I'm the world's worst documenter of events! -- and as we started to share the news, I wondered: what was the earliest photo of Julia here on the blog?

As it happens, it was the birth of her younger sister Isabel in 2006, and it features all three of the big girls:

Eleanor and Julia welcome an oblivious Isabel

Well, it's not 2006 anymore, and everyone has gotten much older. Let me present the Misses Darwin now:

Eleanor

Eleanor, 22, is now graduated from college. After a year of health woes, including surgery and a colonoscopy, she's finally been diagnosed with PCOS and Crohn's Disease -- which news she's given me permission to share, as she'll tell anyone that she's dying of Victorian Women's Disease. We're still in the throes of learning about how to manage everything, including the double whammy of chronic fatigue being a result of both conditions, but she keeps up her good cheer and her artwork. She played Trinculo the clown in my recent production of The Tempest, and was celebrated for, as an experienced Shakespearean colleague put it, "her extraordinary conception of Trinculo as a being who walks about as if he has no bones in his body."

Julia and William

Julia, 21, finds herself in the amusing situation of being engaged to a man with the same name as one of her brothers. Can there be too many Williams, though? She is at The Ohio State University, and recently changed her major to prepare to study midwifery. She loves hands-on work, and is often busy either with her own projects, or with keeping the rest of us on task. She's become a notable costumer, doing work with the University, and also costume design for my productions. After a recent trip to Italy for Christmas, she's come back more fashionable than ever, but reports that there's no place like home.

William, who came into our lives by playing Orsino to Julia's Olivia in my production of Twelfth Night, recently played Caliban opposite Eleanor's Trinculo. I knew that I could count on those two to be supremely ridiculous while rolling around under a gabardine, and they did not disappoint me. William has the bass voice of a radio host and a gentle good nature that is the ideal foil to Julia's energy. He and my son Jack recently adopted kitten sisters from a litter of strays, and now William's Antigone comes over for playdates with Jack's Mithril. I just live here.

Isabel, no longer oblivious

Isabel, 18, is taking a gap year while she decides if she needs a business degree to rule the world, or if she should just keep making money without going into debt. She is the spreadsheet queen, and will manage your business as well as her own. To the chagrin of her sisters, she scored a used 2025 car -- in 2024. If business does not avail her, she has the chops to be a successful TikTok dancer, and was dance captain for my production of The Music Man last summer. She does not put up with your nonsense, but appreciates a good meme.

The rest of the Darwin youths are minors, though at the rate everyone is getting older, that will change soon enough. The comings and goings in the house rarely cease, and we often have several people (and kittens) dropping by for dinner or to hang out. Like Mary, I find myself increasingly inclined to ponder all these things in my heart, and feel less and less inclination to write about them. And yet they are good things (except chronic disease, maybe), and writing them down helps me to give them all back to God, from whom all blessings flow.

We wish you all the joy of the Christmas season, and the peace that passes understanding.

Darwins, minus Julia (in Rome) plus William


Thursday, December 26, 2024

The Lord, No Flies

 Last  year my sister gave me a copy of Society of the Snow, a book about the Uruguayan college rugby team whose plane went down in the Andes in 1972, leaving the players, friends, and family who survived the crash to try to survive on a glacier. Which they did, by among other things eating the bodies of the dead, for 72 days until at last (recue efforts having long ago given up) several of the survivors hiked out ten days to Chile to let the outside world know that the survivors on the mountain needed rescue.


Let's leave aside the question of why my sister ran into a book about survival and cannibalism and immediately thought, "present for my brother."  All I can say is: family know each other best.

My time reading things in print (as opposed to audio which I can listen to while commuting or washing dishes) is limited, but I started it over Thanksgiving and finished it just before Christmas.

First of all, the prose is fascinating: Written by one of the school friends of the survivors, the book has a very written-in-Spanish voice.  I suppose it's an interesting question whether this is a good or bad thing in a translation, but I thought it gave a strong sense of the type of young men who spent two and a half months trying to survive in this frigid and barren landscape.

And really, it's the story of how and why these guys survived that is interesting.

I think the basic cultural expectation about a situation like this is that there would immediately be a great deal of conflict among the survivors. The 2021 prestige drama Yellowjackets (which I haven't seen, but several friends are fans) featured a girls soccer team from the US which is on a plane which goes down in the far north of Canada, leaving the survivors to try to survive in the wilderness.  This leads to rivalries and conflict among the survivors which continue to reverberate twenty years later in their adult lives.

What really struck me in this story is the way in which their desperate situation immediately drew the surviving young men together. They describe their time in the Andes as having created a sense of unity and purpose which they call the Society of the Snow (from which the title of the book is drawn) in which life is reduced to its most essential elements and all rivalries are set aside as they try to help every person survive long enough to be rescued.

The structure of the book is only roughly linear, because each chapter is based upon the story of a different survivor.  While early chapters focus more on the wreck and initial days, and later ones focus more on the trek out and recuse, you hear the full story repeatedly from different points of view.

One thing several survivors talk about is the solidarity of the mountain. Several talk about how they expected to be resented because between shock and injury, they were able to do almost nothing other than live day to day, while others did large amounts of work for the group. And yet, because everyone was focused on helping everyone survive, they each accepted the efforts or each person as what they could do.

I don't know how much of this is cultural. A number of the survivors talk about how their Catholic faith helped them survive, and about the group rosaries they would say at night while trying to avoid falling asleep when it was so cold that full sleep was likely to result in death by hypothermia.

But the survivors themselves, talking about their experience, say repeatedly that the unity and lack of hierarchy they experienced on the mountain was something they considered unique and surprising, both compared to their lives before and after. So at least in their own minds, it was the extremity of their situation which pulled them together and cause them to care for each other above all other things.

Definitely an interesting read and one of my recommendations out of my 2024 reading.

Monday, December 23, 2024

It's The Most Magical Time of the Year

 Saturday was the Winter Solstice, the shortest day of the year. Here in Columbus, OH that meant 9 hours and 19 minutes of daylight.  Now the days are getting longer.  Today there will be a whole 10 seconds more daylight than on the solstice, and by the day after Christmas we'll be up to one whole minute more sunlight.

Early advent calendar?

This is also the time of year when we see recurring articles about how Christmas is actually a thinly veiled refresh of pagan holidays.  Such articles inevitably point to the fact that Christmas is set right around the solstice, and that various pagan holidays also fell at the time of the solstice.

However, this kind of thinking arguably gets the causality wrong.  It's not that Christmas falls near the solstice because it is based on pagan solstice holidays, but rather that both pagan holidays and Christmas fall at that time in the year because it is the solstice.

When everyone's life depended far more on the agricultural cycle of the seasons that it does today, the point at which the days stopped getting shorter and the year began its slow progression towards spring was far more significant. The solstice as the point at which light began to return to the world.

It's not a surprise that ancient pagans celebrated this time, and at times did so with feasting and gift giving.  The solstice was a time to reflect on the promise of the coming year with the return of the sun.

It's also not a surprise that Christians would celebrate at this time as well.  

There are two ways to think about the timing of Christmas.  One is that Christ really was born in late December, at which point it would seem that God truly chose to send the Son into the world with the promise of eternal life at precisely the time of year when the increase in daylight promised new life in the natural world.  

The other is that Christians did not know the precise date of Christ's birth, and so they chose to celebrate it at the time of year in which the natural cycle of the seasons promised new life with the return of the sun.

Either way, this doesn't mean that Christmas was "based on" pagan holidays that fell at the same time in the calendar, but rather that this is a time of year when it is natural for people to celebrate.

I myself am taking off from the day-job until the new calendar year, so in addition to celebrating Christmas with the family I hope to write a bit more in these (virtual) pages which have been so badly neglected of late.

I've also got some business stuff to do.  I continue to post new articles about pricing at Pricing Evolution every week.  If you're at all interested in those, drop by and consider subscribing (it's free!)  And I'm working on a business site related to that project, which hopefully will be up by the new year.

Best wishes for a blessed Christmas to all of you from the Darwins.

Wednesday, December 04, 2024

Hanging on by my Fingernails!

 It is the eve of my 46th birthday, and I want to tell you about possibly the most astonishing, unexpected thing that has happened to me in my more-than-four-and-a-half decades:

The scab is from the kitten. I have almost the exact scratch in my wedding photos 23 years ago, when the old deceased cat was a kitten.

After almost forty years, I have stopped biting my nails.

I have bitten my nails since I was seven years old, when someone told me that the piano teacher would cut your nails if they were too long. (That, at least, is the reason I remember. Who knows why we do what we do?) I'm almost afraid to say it out loud lest I jinx it, but the more I analyze that thought, the more I realize that it's a fear of accountability. So let me say it again:

I have stopped biting my nails.

I do not understand it, but from the timing, I guess that it has something to do with protein. Since I started  eating a metric ton of protein, both to support my daughter who needs it, and at the hest of the dietitian, food has become very dull. The fact that I can find and consume protein with a minimum of effort makes this a very first-world problem, and yet I grow weary of it, you know? I have lost almost ten pounds, some portion of which I can instantly regain if I increase my portion sizes of anything or decrease my protein intake. Currently I'm in a rut, waiting to break out of a plateau.

But I've stopped biting my nails.

"I will believe it's true," I said, hedging my bets, "if I make it through the show without biting my nails off." And my nails survived through tech week, through performance, through strike, through the week-and-a-half of postshow stress dreams. They survived Thanksgiving. They survived yesterday, when I microplaned my thumb while grating cheese and shaved off the top layer of my thumb nail. But I didn't shave my thumb! Because it was protected by a fingernail! 

(It turns out that fingernails won't protect you if you microplane your knuckle, however. At that point I decided we had enough cheese.)

I look down at my hands multiple times a day, to make sure that my nails are still there and still growing. And sometimes I just look in astonishment at my nails! on my own hands! I'm considering getting a manicure, because I can! 

Often, as I approach my birthday, I find myself fighting a malaise, as I consider how many things I have not done over the past year, and whether they would have mattered anyway. But this year, through no real action of my own, a thing has been done to and for me. My nails have grown, on their own, without my agency, without my doing anything except not biting them, which I didn't do on purpose. If I had felt the urge to bite, I certainly would have done so. I don't understand it. But it's the very definition of gift, unsought, unexpected, unhoped for because impossible. 

I have stopped biting my nails! Happy birthday to me!

Tuesday, November 26, 2024

The Tempest

We have been recovering these past weeks -- first from the show, and then from the vicious and highly contagious combination of a cold and pinkeye. The cold and pinkeye we will decline to share with you, but here, have a show: The Tempest, by William Shakespeare.

The video quality is not what we could have wished, but after the first scene it evens out. If you watch nothing else, catch the pageant of the goddesses, starting at 1:47:00, and appreciate the perfect marriage of Sibelius and fog machine.

For those watching for Darwins, the oldest, Eleanor, plays Trinculo the clown, and Caliban is the boyfriend of the second Miss Darwin. I cast them against each other because a) they are both fantastic individually, and b) I knew they'd commit to stupid shenanigans under a gabardine. My third daughter's boyfriend appears as Francisco, the youngest of the Neapolitans. Date a Darwin, get pulled into community theater.

Wednesday, October 23, 2024

Pricing Chronicles

 If you're connected with me elsewhere on social media, you may well have already seen this, but it seems reasonable to post a link:  As you may know, since a year after the time that I started this blog, I've been a professional pricer.  During that time I've managed pricing for Dell Computers, Wendy's, Scott's Miracle-Gro, and now an industrial tooling company called Hyperion.

Now that I have a fairly wide range of pricing experience (and may in the not too distant future want to write and consult more widely on pricing) I've started a Substack specifically to write about pricing.  It's called PricingEvolution, which long time readers of this blog may recognize as being a bit of an in-joke as well as a reference to developing one's pricing abilities.

Here's a link to the substack main page.  Subscribing is free, and although I plan to enable some paying levels in the future, I can assure you that the articles themselves will never be paywalled.

So far, I've written a post about my career progression from Classics major to VP of Global Pricing

One about the dynamics at play when some customers are attached to a specific product while others are attached to the price the product is sold at, based on my experience at Wendy's when we moved the Jr. Bacon Cheeseburger off the $0.99 Menu.

And today's post which is about how Starbucks has experienced the dangers a brand faces from deep discounting, and their attempt to back away from the strategy as they call down their revenue and profit guidance for the year under the leadership of their new CEO.

PricingEvolution will always be focused specifically on pricing; it's not a personal blog.  And DarwinCatholic will continue (at least at the slow level that is has run in recent years.)  But if you'd find it interesting to see my writing about pricing, do please go ahead and subscribe.

Wednesday, October 16, 2024

Education, Expertise, and Interest


I feel like every few weeks I see one of these posts in which someone with multiple education degrees asks how a homeschooling parent could possibly be qualified to teach all subjects to all ages when said degree holder is despite years of training only qualified to teach specific ages and subjects.

This kind of thing points to some real problems with credentialism within our modern education system.  However, I want to leave that to one side and address two points which I think are worth highlighting.

First, learning to manage and teach a classroom with twenty children is very different from teaching your own children. I'm not convinced that we necessarily need a four year degree and then an advanced degree as well just to teach someone how to plan and manage classroom teaching.  I suspect that we could successfully train and credential people a lot faster while giving them time while in college to devote themselves to a subject matter rather than teaching itself.  However, productively managing a classroom full of kids is a definite skill, and learning it is going to take time.

By contrast, teaching children at home is often a lot more like parenting than it is like managing a large number of other people's kids in a formal schoolroom environment.

Yes, there are times when it is important to seek out some specialized materials or techniques. After quite successfully teaching the first four kids to read using the 100 Easy Lessons book, MrsDarwin had to seek out a specialized curriculum for teaching kids with dyslexia to read for our fifth child.  And then for the sixth and seventh, she was able to go right back to the old system. Special needs required special techniques. 

But a lot of the time, teaching younger kids at home is a lot like doing any other activity with them. You sit down to read or do an activity, you provide some guidance, you make sure they do their activities. While there will be occasional kids who will need something special, teaching most kids to read and do basic math is not hard for the average parent to do with a few easily chosen books.  And teaching young kids about history and science is quite honestly often just a matter of sitting down and reading aloud, or even turning them loose to watch some decent TV programs on an interesting topic.

The second topic I'd like to address, however, relates to somewhat older kids, and it has to do with teaching expertise.

While I think it's pretty obviously misguided to think that someone needs one advanced certification to teach math to third graders, but a different one to teach them science, and so on -- I can see why someone would think that someone teaching middle school or high school science, history, literature, etc. should have pretty in depth knowledge of all those topics.  How is a parent going to be an inspiring expert in all those fields?

For one thing, it's worth being honest: most high schools and middle schools also do not offer an inspiring expert in each of these fields. Certifications set minimum, but they don't create inspiriting personalities or deep expertise. You can bet that your certified high school biology teacher can explain what the Krebs Cycle is, but that doesn't necessarily mean he will have an infectious enthusiasm which makes numerous students go into biochem. A lot of well trained teachers (like a lot of trained professionals in other fields) are going to be just okay, even as others are going to be brilliant.

But even so, wouldn't the middling high school biology teacher who knows about the Krebs Cycle be better for teaching kids about biology than a parent who may not remember the Krebs Cycle at all?

So here's where I find myself wondering a bit.  Because, as in this example, a lot of adults do not remember learning about the Krebs Cycle. Indeed, you could even work in a lot of other areas of biology without thinking about the Krebs Cycle often.

Let's picture two different ways that studying biology while being homeschooled in high school might go. 

In one case, the parent picks out a solid high school biology and makes the student read the book. The parent may not remember a lot of the topics covered well, but if they run into trouble the parent does some Wikipedia work or otherwise helps look up questions.

In the other case, the student reads a half dozen popular science books on topics that seem interesting about animals and watches a lot of documentaries and YouTube science videos. The student's knowledge is very spotty, perhaps, compared to reading a comprehensive biology textbook.  However, the stuff he reads he finds really interesting and retains.  Perhaps this leads to a longstanding adult interest in a few biology related topics, and he continues to read about those through the rest of his life.  Or if he feels really inspired to go deeper into the topic, he takes biology when he goes to college and perhaps even ends up majoring in it.

Which of these is a better science education, the one which mimics a traditional classroom with a solid survey text, perhaps rather uninspiring but thorough, or the one which is spotty but driven by interest?

I think that in a number of cases, homeschoolers may end up covering some topics more in the latter fashion. They may never do the broad survey study which modern middle and high schools emphasize.

However, it may also be worth asking: how much good are these broad survey courses achieving in many average schools across the country? Are there perhaps many cases in which an interest-driven approach to learning, while in places spotty and shallower (though also with certain areas of depth) actually leaves many homeschoolers retaining more education 20 years later than some of their traditionally schooled peers? Does the breadth of a traditional course count for much if most of it is never retained by most students? 

I don't think there's any question but what a deep and broad course taught by a passionate expert, which really inspires people to love the topic, is the ideal.  But ideals don't always happen, and often people are picking between various non-ideal options. 

I do wonder whether if homeschoolers are often ending up pursuing topics with more interest, even if also less thoroughness and expertise, they end up better served for the long run.

Monday, October 14, 2024

Darwiniana

I no longer call myself a writer, for the simple reason that I don't write anymore. There are plenty of reasons I've let what skill I had atrophy -- some good, such as taking on other responsibilities or nurturing relationships with my older children; some poor, such as an unwillingness to practice, or a willingness to be distracted, or a weariness with trying to shape ideas into words in an environment where curious and critical youth are constantly looking over my shoulder. 

That said, writing is how we communicate over time and distance. Whether or not I feel like writing (usually not), I do want to communicate. So, have a pomodoro's worth of writing.

***

Here's what was on the 2024 bingo card: The Tempest! I am directing, and we are in the midst of rehearsals. This should be a lovely and magical show, so if you're anywhere in the Central Ohio area over the second week of November, come and see it! Tickets are available here.

It turns out that Sibelius wrote an entire suite of Tempest incidental music, so here, enjoy Juno's glorious blessing, and then come hear it live with harmonization for Ceres and a chorus:


***

Here's what I should have expected to be on the 2024 bingo card: the doctor leaning back and saying, "Well, you're perfectly healthy, but you could lose twenty pounds. Would you like to talk to a dietitian?"

This is why women of a certain age put off checkups: because we know we're going to be told to lose weight. If I knew how to lose twenty pounds, I certainly would have done so by now. "It's a matter of portion control," said the doctor, and there was certainly some control going on because I did not immediately torch the office, nor scream into the void, but meekly said "Sure, I'll talk to a dietitian," when I desired to say, "Go to hell." 

Perhaps there is a gendered difference in the reception of this message. Darwin, who is a better person than I am, does not have his ego wrapped up in whether one carries twenty extra pounds and so did not respond as if this was an extraordinary request and a judgment upon my very existence as a pre-perimenopausal grandmultipara, and this lead to a tense weekend between us until I got over myself. And at my next meal, I watched my damn portion.

***

Not on the bingo card: the week after my appointment, my oldest daughter (the one who was so sick during her last semester of college, who no doctor would pay much attention to whether at the college clinic or at the ER, who had surgery in June and has been recovering very slowly) and I were at the OB/GYN reviewing her bloodwork, where she was diagnosed with PCOS (not a surprise) and insulin resistance (unexpected). She was prescribed Metformin and needs to eat 80 grams of protein a day and watch carbs, and the GYN recommended a continuous glucose monitor.

Well. It may be beyond human endurance to be asked to lose twenty pounds by sensible portion control, but it turns out that it is simply in the nature of parenting to alter one's diet in solidarity with one's child. And it turns out that eating small portions of high protein and low carb is conducive to losing weight in a person with no health problems otherwise, and I have dropped eight pounds. And as, between you, me, and the wall, I do not actually believe that anything short of starvation would cause me to lose twenty pounds and hit a weight I have not seen for more than a decade and two pregnancies ago, I'm okay with that.

***

Also not on my 2024 bingo card: my son has fallen in love with a female and has moved her into his room. 


Dammit, my old cat is 18 years old, and I have been looking forward to a pet-free existence. And now we eat dinner like this: 


No one has any respect for my nerves.

Saturday, August 31, 2024

Replacement Level Fantasy

The older members of the family sat down over the last two nights to watch the first three episodes of Amazon Prime's streaming franchise Rings of Power, our kibitzing enhanced with long distance friend Brandon via Messenger.



Paradoxically, the second season is both better and less fun to watch and discuss than the first season.

The first season was so epically bad (or such bad epic, if you prefer) that we'd spend a good hour or two after each episode discussing how it could have been written, both to be more interesting and to draw more directly on the what Tolkien says in the appendices about the Second Age.

This time, it's still not a very believable presentation of Tolkien's world. And although the new concepts this time are more interesting (and less gimmicky) they're still locked in to a number of not-very-good things from last time.

However, Season Two is at least a basically credible replacement level fantasy series. In this regard, it at least makes sense as its own thing (though with a chronic and very modern tendency for all travel to happen in no time at all.)

It's still a weirdly empty world, populated at least as much by ruins and vagabonds as by settlements, but that seems to be a trend in some fantasy worldbuilding.

As such, I think it will tend to get a better reception than the first season. But as I say, I'm finding it less interesting because I don't actually like to read or watch replacement level fantasy. I can enjoy fantasy and science fiction, but I expect it to be really good and interesting.  It not a unique requirement I put on genre writing.  I try not to read replacement level fiction at all, though I suppose to the extent I sometimes put up with it it's in the historical genre.

Some additional discussion which contains spoilers regarding the first three episodes follows:
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Galadriel, fresh from having been spent two thirds of last season being buddies with Sauron-in-disguise, is less weirdly impulsive than before, but she still seems like a much less important character than the Tolkien one, who spent centuries at the right hand of Melion (a semi-angelic being in elven form who has powers approaching those of a pagan-type god.)  She and Elrond have a falling out over the question of whether the elven rings (which were thrown together in the last episode of Season 1 -- in the Appendices they take 90 years for the elves to make) should be used or should be destroyed because Sauron-in-disguise was around for their making.

This happens in the context of the rings very quickly and obviously healing the mysterious blight which was affecting all things elven in Season One. Galadriel, Gil-Galad, and Cirdan take on the rings and are immediately impressed with the results.  Elrond, however, is unconvinced.

We don't get any very cogent discussion of why the two sides hold the views they do. The most we get is a discussion between Cirdan and Elrond in which Elrond argues, "Sauron is bad, and he helped influence the making of the rings, so the rings are bad," and Cirdan argues, "There has been lots of beautiful poetry written by alcoholic and unpleasant poets."

Contrast this with the discussion in LotR of whether the One Ring can be used for good. There Galadriel explains that the One Ring would allow her to have dominion over others, exercising power of their wills in a way which is in and of itself wrong. Even though she might achieve results which are seeming good, the thing the ring allows her to do is wrong.

What we never really get in RoP is a discussion of what the elven rings allow you to do. They heal the mysterious elf blight, but that in itself (never hinted at in the books) was a gimmick problem, and the rings are a gimmick solution.

We're told that they "give power over the unseen realm" but what does that even mean?  Power how?  To do what?  What is the unseen realm?  To be honest, I'm not clear the showrunners care much.  The conflicts here are pretty shallow and I don't think we're expected to think about them much.


Meanwhile, the dwarves are having their own problems. Apparently they grow all their food underground using shafts of sunlight, but the mountain is no longer healthy, and this means all the shafts have closed up due to earthquakes and the dwarves are in danger of starving. But maybe they can get magic rings from the elves to solve the problems if only Durin and his father than get over their mutual pride and stop holding resentments.

Why is the mountain restless?  Why don't dwarves either grow food above ground or eat something that doesn't require light?  Look, we can't expect answers to these questions.


The Numenorian Expeditionary Force has gone back home to Numenor, where the old king has died. The Queen is getting ready to be crowned his successor, but it's mostly being kept secret that she was blinded in the pyroclastic flow in Season One which had a very selective effect on various characters.  

The weirdly modern anti-war movement in Numenor has resulted in the relatives of various people who died in the expeditionary force shouting at or even striking the queen, but she's pursuing a strategy of having important hug moments with those people rather than treating them like people who struck a queen.

Some nobles, including her right-hand-cousin Pharazon, decide to have a treasonous conversation in a public drinking establishment about how they'd rather he be kind than she -- and get challenged publicly on it by a loyal Numenorian -- but this isn't the sort of kingdom where that comes to anything. Instead, we wait to see if the queen can make it through her coronation without giving away that she's blind, and if an eagle will show up during the coronation as a good omen.

The good omen eagle arrives! But Pharazon approaches it and suddenly the whole crowd acclaims him instead.  Suddenly it's his good omen instead of hers!  And maybe we've becoming kind, we're not quite sure.

If you're thinking: this is now how monarchies work!  Well, you're right.

Even if you were writing War-of-the-Roses-with-dragons I would expect to see some more interesting elements of power and intrigue going on here. And if seeing an eagle the size of an Apache Gunship show up is really important to these people, why are they so easily distracted by someone else walking up to it? Is this even real set of beliefs?  It doesn't seem like it. 

But Tolkien's Numenor isn't just some replacement level pre-modern kingdom. These are the men who participated in the war against Morgoth. They were set up on this island within sight of the semi-divine land of Valinor. They have a powerful empire with outposts all over the mainland, where they increasingly rule over the men of the mainland. (In the series, these outposts are all oddly abandoned and semi-ruined, and Numenor doesn't seem that great an empire.)

The thing which eats at the Numenorians in Tolkien, however, is that they are so close to being immortal elves, able to enter Valinor, but they can't quite. They've become jealous of the elves and resentful at their mortality. They've become attracted to elements of mysticism and the occult in search of ways to make themselves immortal like the elves.

The desire to overcome death and become immortal is a pretty universal human with for the powerful.  Look at the Silicon Valley titans who want to either make their bodies immortal or upload their consciousnesses to computers. It also gives a real and deeply human reason for the Numenorians to dislike the elves -- and a weak spot for Sauron to exploit when he interacts with them. 

But in Season One we instead get Numenorian trade unions who are worried elves will steal their jobs. I kid you not.  (Or in the semi-high-flown language of the series: I do not jest.)

And in the struggle between different factions we get in Season Two, none of these interesting themes are present. We just get vague superstition (Will there be an eagle?) and generic anti-war complaints and an unexplained dislike for the elves which results in people being horrified that the queen wants to keep the "elven made" palantir around.  (Real queens should only Buy Numenorian!)

There's lots more that's going on, but none of it is particularly interesting.

If you want fights and cool looking scenery and everyone having something to mourn and something to feel insecure about, you'll enjoy this. But this doesn't have any of the interesting world or thematic elements from its source material.

Saturday, August 10, 2024

Chapter 2: The Power of Pricing

A few weeks ago, I posted a first chapter to a book that I'm writing "for work", writing about pricing in the context of my experience a decade back managing pricing for the fast food chain Wendy's.

When I say "for work" it's not at the request of my current employer. But as the company I work for moves towards being sold by the private equity company that owns us, I am thinking about starting a price consulting company as my next step. And if you want to be a pricing consultant, it doesn't hurt to have a "business card" kind of book which shows off your expertise on pricing.

Often these books are written to impress other pricers, and so they are focused on mechanics of pricing theory or how to run a pricing department. My thought is to try to write a somewhat more accessible book aimed as business owners and the general public, and explaining through the medium of something we all know (fast food) how pricing works in a business.

My hope is this would be moderately successful as a book, as an advertisement to potential clients, and as a "here, let me give you a copy of my book" tool when seeking business.

Anyway, I probably will not post the whole thing here in installments, but I did think I would post at least one or two more chapters in order to get feedback and to write the way I'm used to: with a live audience.

So, here is. As before, feedback very much welcome. Is it readable? Would you enjoy this book?



Chapter 2: The Power of Pricing

Picture, if you will, that you manage a successful fast food franchise restaurant. Over the last year, your total sales were $2 million, with expenses of $1.8 million, meaning that you made a 10% profit.

One day, you are cleaning up and – after rubbing an old bronze lamp which mysteriously surfaced in the maintenance closet – you are visited by the Business Genie, who offers you just one wish.

By magic you can choose to:
  1. Increase your prices by 1% while selling just as many items every day
  2. Increase your volume by 1% (selling 1% more items every day at the same prices and costs you have now)
  3. Decrease all of your costs by 1%

Which should you choose?

Would the effect of each be the same? All the changes are 1%, after all.

Not at all.

Given this set of assumptions, the price increase is the best choice. It would increase your annual profits by $20k. Next best is the cost reduction, which would be an $18k increase in profits. Going with the volume increase will net you only $14k in increased annual profit.

It’s pretty clear why increasing your price 1% on $2M will result in a $20k impact, and why decreasing $1.8M in costs by 1% results in a $18k decrease in costs, but the reason why I’m estimating the cost increase which comes with selling 1% more volume at $6k could use additional explanation. For the moment, I’ll just say that if you sell 1% more burgers, you have to buy 1% more burgers, but you don’t necessarily have to pay 1% more in rent and 1% more in wages.

Since in this example your annual profits were $200k to start with, that 1% increase in price has boosted your total profit dollars by 10%.

Professional pricers love to share this kind of example. Indeed, if you’ve read a number of books on pricing or attended multiple pricing conferences, I owe you an apology, because you’ve probably heard this kind of thing many times before.

But although to some extent we pricers share this kind of example because it makes us and our services important, there’s a vital lesson to be learned here. Too often, decision makers trying to grow their business put most of their effort into pulling on the less powerful levers in their business (cutting costs or increasing volume) and miss the power of the pricing lever.

So indulge me here (or skim ahead if you must) while I discuss these three levers and why the pricing one is so powerful.

Increasing Volume

If you want your business to make more money, perhaps the most natural thing to think of is, “How can I sell more?”

As a professional pricer, I’d love it if more people hired me to analyze their pricing. As an author, I hope lots more people buy this book. When you run a QSR location, you want more people pulling into the drive thru.

At first blush, it might seem like more volume is simply more volume, but when it comes to analyzing the advantages and pitfalls of volume and how you get it, it’s worth looking at the type of incremental volume you’re getting.

There are two basic ways we talk about more sales in the QSR industry: more tickets, and larger tickets.

More tickets means more individual people buying food from the restaurant. Whether someone walks into the store and approaches the register, or, like about 80% of customers they pull into the drive thru, each customer order is a ticket.

All other things being equal, more tickets means more revenue. But how do you get more tickets?

There are so many ways: Have a welcoming dining room experience so seniors and young families pick your location as a place to come get something to eat and socialize. Offer exciting new limited time menu items which people want try before they are gone. Open earlier or stay open later, so that people wanting to eat at odd times come to your store. Advertise so that people who see or hear your ads crave the food you serve.

Some of these tactics come with their own extra cost. Being open longer hours means you have more wage expenses to cover. Advertising always has some cost, whether it’s a radio jingle or just a vinyl sign on stakes out by the road. New food offerings have an R&D cost and perhaps the cost of bringing in new ingredients which are only used in that specialty product. And, of course, no one will be craving your seasonal product if you aren’t advertising it somehow, even if it’s just a delicious picture on the drive thru sign.

But even setting aside the extra cost of trying to get more volume, when those extra people come to your store they all buy food, and that food has a cost. This means that if you get ten extra people into your store each day, and each of those people spends ten dollars (10 tickets X $10 = $100/day), your profits don’t go up by one hundred dollars. Your profits increase by $100 minus the cost of the food on those tickets and minus any money you spent to bring those extra people in.

How much cost is involved in selling that extra $100 worth of food can be a tricky question.

In my simple example which opened this chapter, the overall store has 10% margins.

Say that in this example where ten more customers come in each day, you didn’t spend any more on advertising and you didn’t increase the hours you are open. You also don’t have to bring in extra staff in order to serve the additional customers who come in ordering food. Let’s also assume that any additional work you need to do in order to serve those extra customers does not end up increasing the cost of your maintenance or utilities.

In that case – if we use our simple assumption that your cost structure is 30% food cost, 30% labor cost, 30% site costs – your labor costs and site costs remain the same. On the extra revenue you make from serving those ten extra customers each day, you’ll make a 70% margin instead of a 10% margin.

Or in the case of our Business Genie offering to increase volume by 1%, if that increase in volume incurred no extra labor costs or site costs, the increase in annual costs would be $6k ($20k in revenue minus 30% food costs on that $20k) and the increase in profits would thus be $14k.

What this breakdown is getting at is the difference between what are called variable costs and fixed costs. In this very simple model, we’re treating food costs as variable costs (you can’t sell more burgers and fries without buying more patties, buns, and fries) while treating labor and site costs like rent as fixed.

The distinction is clearly important. It matters a lot to the profitability of selling one more hamburger that that hamburger itself only increases your costs by the expense of its ingredients.

However, the distinction isn’t truly fixed. With sufficient volume, all costs become variable. Imagine that instead of one or ten more hamburgers a day, you sold 1,000 more each day. Now you definitely need more people. And a bigger fridge to store your patties. Maybe you even need a bigger location or to open a second location to serve all that customer demand.

And of course, short of our magic Business Genie, getting more people to visit your store each day seldom comes free. Usually you’ll be doing something to get those people to come: putting up signs or running ads or announcing a discount. All of those ways of increasing your volume have their own costs. And if you are going to spend money in order to increase your sales volume, you need to ask yourself what the actual profit on the additional sales volume will be, versus the cost of your volume driving activities.

As you make that calculation, you’ll need to think about what costs are going to increase as your volume increases, and that answer will vary depending on how many additional people come, when they come, and what they order.

***

Getting more people to visit your store each day can be hard. Wouldn’t it be great if you could simply get all the people who already visit your store to each buy a little bit more?

As I said, there are two ways to increase your volume at a QSR: more tickets or larger tickets. Since it’s hard to get more people to visit your store, it’s often tempting to instead focus on getting your existing customers to buy more items or more expensive items on each ticket.

The classic example of expanding the ticket in fast food is the phrase everyone has heard, “Would you like fries with that?”

Or to take things one step further, “Would you like to make that a combo?”

The fast food combo is a great example of expanding the ticket. It takes a customer who is already buying an item, and encourages him to add two more items: fries and a drink.

Of course, the combo price also represents another pricing trade off: a discount. When you buy a combo meal, the price is lower than if you had bought the entrée, fries, and drink each à la carte. Discounts present a whole other set of pricing trade-offs which we’ll address in a later chapter.

The other way of expanding the ticket may not seem as immediately obvious: offer the customer an option which is more expensive, but also more enticing, than what they would otherwise have bought.

If I head to a local Wendy’s planning to pick up a standard cheeseburger, but end up buying a Big Bacon Classic or a Pretzel Baconator, I’ve just increased my ticket size even if I’m still just buying the one sandwich.

These two approaches to increasing the ticket – selling more items to each customer or getting the customer to trade up to more expensive items – represent two important ways of maximizing the profitability of your existing customers in any business.

Both these approaches to expanding the ticket – adding fries and a drink or upselling the customer to a more expensive product – allow us to think for a moment about another important QSR dynamic: Not all products have the same profit margin.

Up till this point we’ve talked about an average food cost of 30% of revenue. That’s a typical overall food cost ratio for a QSR location. But not every item is 30% food cost. Some are less, and some are more.

A hamburger on the value menu (back when the popularity of the $0.99 or $1 price point for value items made it essential to have several value sandwiches at that dollar price point) often had the highest food cost percentage on the menu. When I ruined my future coworker’s college experience by taking the Junior Bacon Cheeseburger off the value menu, a rapid increase in bacon costs had driven the food cost of that item up above 60%.

Fountain soft drinks and ice tea had some of the lowest food cost on the menu. A fountain soft drink consists of water which has been put through the ice maker, more water which has been carbonated with a tank of CO2, and a bit of sugary flavor syrup. Water which flows into the store in the pipes from the city water supply is very cheap, and only very small amounts of the CO2 and syrup are needed for each cup. Often, the cup is the most expensive part of the drink.

While a full size hamburger or chicken sandwich is around 30% food cost, a soft drink might be only 10% food cost with much of that coming from the cup (not literally food, but considered part of the food cost since “food cost” in QSR is essentially what “material cost of goods sold” would be in a manufacturing business.)

This means that adding a soft drink to a fast food meal not only increases the size of the ticket, but also significantly increases the profitability. French fries are not quite as high margin as soft drinks, but they are significantly more profitable than sandwiches, so the drink-and-fries combo is a real profit maker.

It’s worth a brief digression on why fountain drinks are so profitable. You would not do nearly as well adding a bottled or canned drink to a meal. Why?

Napoleon said: “Amateurs discuss tactics, professionals discuss logistics.”

The general would thus have appreciated the wonderful thing about fountain drinks: when a customer pulls out of the drive through with a 30oz Coke nestled in his cup holder, most of the weight he’s driving off with is in a vehicle for the first time.

The cup, lid, and straw were brought to the location in a truck, as were the canisters of compressed CO2 and the flavor syrup. But cups and lids are stackable and very light. A case of 500 cups might weigh around 25 pounds.

By weight, the largest contribution to the final drink which had to be carried to the restaurant by truck is the flavor syrup. A soda fountain mixes carbonated water and flavor syrup in a 5:1 ratio. So if a 30oz cup (which with lid and straw weighs less than two ounces) has 10oz of ice and 20oz of soda, it contains just over 3.3oz of flavor syrup.

Only about 5oz of the 30oz drink had to be trucked to the store. The rest of the weight arrived via the city water pipes, and is thus incredibly cheap. Pipeline systems are expensive to install, but once in place very cheap to operate.

A 30oz fountain drink thus only has a freight-weight which is 75% less than a 20oz bottled soda. That makes it cheap (as well as somewhat more environmentally friendly) because liquids are heavy and thus shipping liquids on trucks is expensive.

If you watch for trends in the prices when you go grocery shopping (and as a professional pricer, I can’t help doing so) you’ll notice that in periods when trucking costs increase significantly, heavy products (which often means liquid products) increase in price: soft drinks, bottled water, milk, etc.

That’s because when a comparatively cheap product weighs a lot (like a 8.33lb gallon of milk which retails for $3.49) the cost of transporting the product from its source to the store becomes a significant part of the overall cost. And thus, changes in the cost of transportation (due to diesel prices or availability of trucks and truckers) have a larger effect on the cost of those products than on ones which are lighter or more expensive.

So to bring this digression back to its beginning: fountain drinks are among the cheapest things on the fast food menu. When a customer rounds off the ticket by adding fries and a drink to his meal, it not only expands the ticket, but does so with items which are higher margin than the entree they are added to.

Decreasing Cost

Tell a manager that he needs to increase margins, and the first thing he will typically think of is to reduce costs.

Psychologists point out that we humans are loss averse. We are particularly aware of having things taken away from us, sometimes so much so that we focus on avoiding loss even when making a different choice would provide a good chance to gain even more. Costs take our money away, and so we tend to be very aware of them.

However, as the hypothetical which begins this chapter points out, reducing cost is a pretty good way to increase profits. Moreover, it can seem like the way which is most under the control of the manager.

Increasing your sales means relying on more customers to show up, or each customer to buy more.

Increasing your price relies on the customer’s willingness to pay higher prices, rather than going to a competitor or buying less.

Find a way to reduce your costs, and you can rely on having those savings in hand.

In our example, the cost reduction was magical, which of course makes it very simple. But let’s take a few moments to think about the different ways that a business can reduce cost.

As mentioned in the previous section, costs can be broken down into fixed costs and variable costs. Perhaps the simplest cost reduction is to reduce the cost of the materials used to make the product you sell. If you sell hamburgers, and you can get your ground beef, buns, lettuce, and tomatoes for less money (while keeping your prices the same) you will make higher profits.

There are three ways you might achieve this: A commodity cost reduction, negotiating with your suppliers, or reducing the quantity or quality of the materials you use to make your product.

The cost of raw materials varies over time. General inflation is when all prices in the economy go up by roughly similar amounts because the money supply gradually increases. It’s normal for there to be low but steady inflation over long periods. Modern central banks try to fine tune the economy to make sure that there is low single digit inflation: not too much, but always some.

However, various goods your business might buy – whether foods like beef, wheat, and bacon or industrial materials such as steel, aluminum, and coal – also vary in price over time independently from general inflation, based on changes in their availability.

For instance, here is the data from the Federal Reserve showing the price of a pound of bacon in the US since 2008. After remaining relatively flat for more than two years, in mid 2010 the price of bacon increased by about 30%. It was this increase in the price of bacon, during my time as pricing manager at Wendy’s which caused us to remove the Jr. Bacon Cheeseburger from the $0.99 menu.


Over long periods of time, due to inflation, the general trend is upwards. However, there are periods when the price decreases. For instance, according to this data, in October of 2022 the average price of a pound of bacon reached $7.60. Since then the price has varied – currently it sits around $6.80, about 10% below the high – and has not again reached the high from the fall of 2022.

If you had set the price of your restaurant’s bacon cheeseburger based on that 2022 price, and your cost of bacon has since fallen 10%, you could increase your profits by just keeping your prices the same.

It’s nice work if you can get it, and if your competitive environment allows you to keep your own prices stable when your costs fall like this, you should do so. It will allow you to increase your profit margins and build a cushion against the next time costs rise.

But commodity market deflation cannot be summoned up at the business owner’s wish. So while it’s true that you can use a conveniently-timed decrease in commodity costs to increase your margins, you are dependent on events for the opportunity.

If cost increases aren’t coming to you via the commodity markets, another approach to reducing your costs is to simply demand that your suppliers decrease their prices if they want to continue doing business with you.

Will that work?

Outside of a wish-granting genie, the difficulty with reducing your material costs in this way is that if you are simply paying your supplier less for the exact same quality and quantity of materials, you may be increasing your profits, but unless the broader market cost is going down, he is seeing his profits shrink.

One thing that surprised me working in the quick service restaurant industry was that major restaurant chains do not actually get their ground beef significantly cheaper than consumers do at the grocery store.

The market for beef is controlled by the fact that the total demand is moderately stable and the supply cannot change too quickly since it takes about two and a half years to produce beef, from breeding to slaughter.

Cattle growers and processors work at narrow profit margins, but they won’t choose to sell below their costs. Thus there is a clear bottom limit to what price they will sell at, no matter how big the McDonald’s or Wendy’s supplier contract might be. Nor can a potential competitor produce the millions of pounds of beef needed upon demand.

As a result, once the supply chain for fast food beef has been optimized for efficiency, there are only very small, incremental savings which can be wrung out of it.

For the consumer, on the other hand, there is another source of savings available, since grocery stores are sometimes in a position to sell short term excess amounts of beef at a discount. Or, failing that, grocers may choose to bring customers in their doors by making ground beef a loss leader.

Large companies like fast food chains are committed to wringing every last ounce of metaphorical fat out of their supply chains, and those efficiency savings definitely go to increasing their margins by driving their costs down, but even so there is extremely limited benefit to be found in simply demanding that vendors cut prices.

That’s why chains are often tempted to take the third route and reduce costs by reducing quality or size.

The power of reduced size can be seen in the patty sizes of value menu hamburgers. When I was managing prices at Wendy’s, it was the era of the $0.99 or $1 menu, with each major chain offering several items at the dollar price point. Today, due to overall food price inflation, value menu prices are higher.

However, either way, the hamburgers you see on these menus, such as the McDonald’s Classic Burger, the Wendy’s Jr. Hamburger and the Burger King Jr. Whopper use beef patties half or less the size of the standard quarter pound full size hamburger patty.

McDonald’s has the smallest value patty, at 1.6oz. Wendy’s value patty is 1.8oz, and Burger King’s is a full 2.0oz

This means as the three major chains competed to provide value menu offerings, the chains with the smaller patties always had a cost advantage against those with larger ones. The difference between a 1.6oz beef patty and a 2.0oz one is small enough to be non-obvious to customers. And yet, spread across millions of burgers, a 20% smaller amount of beef is a very significant savings.

These kinds of money-saving product size changes are so common among consumer packaged goods that the tactic has earned its own name: shrinkflation, so named because in terms of value per dollar it is a price increase on the customer achieved through subtle reduction in product size.

Packaged products ranging from potato chips to potting soil have seen package sizes reduced over the years (while prices remain the same or higher) as a way to increase margins by cutting costs.

Because fast food menus feature single serving items, such changes in size are less frequent. Customers may not notice if your patty is 1.6oz instead of 2.0oz, but they’ll certainly notice if you take away another 0.2oz ever year or two.

However, other forms of cost reduction are more easily achieved. Sometimes this involves taking out preparation steps or moving to cheaper ingredients: no longer toasting the hamburger bun on the grill, or going from full leaves of lettuce to chopped lettuce.

But there is, of course, a risk. Take too many of those moves, and your customers will start saying that your product just isn’t as good as it used to be.

If a product becomes perceived as too cheap as a result of repeated cost cuts which are also quality cuts, it becomes necessary to either introduce new, higher quality products while relegating the old ones to a down menu value position, or to conduct a product refresh in which quality is put back into the product. Sometimes this kind of product refresh, if marketed correctly, can even create an opportunity to increase the price.

We’ve looked at three ways to reduce the cost of producing the product. But could you reduce your fixed costs instead?

These might be some of the most difficult. Rent seldom decreases. No worker wants to accept a pay cut. But one key way to reduce fixed costs is through efficiency. If you could run your restaurant with fewer people, even if those people made more money per hour than before, your costs would be lower.

Sometimes this might involve time saving technology which allow one worker to get more done. But other times it might be as simple as thinking about the best times to be open.

Why is it hard to find a restaurant open in the middle of the night?

It takes a certain minimum number of people to run a quick service restaurant. At a slow time, you might be able to get away with one person who ran the register, poured the drinks, and wore the drive-thru headset, while a second ran the grill and a third ran the friers. But if business is slow, those three people would be serving fewer customers.

If the number of customers coming in the hours after 10pm is low enough that your crew is sitting around half the time, you would save money by not being open until midnight.

Of course, everywhere there are trade-offs. If your location becomes known for not being open late, it may be that fewer people will stop at other times. If someone remembers that she came at 11:30 and found it closed, she may not bother to stop by when it’s 9:45, even if you are in fact still open.

But while the existence of trade-offs means that it’s important to test, and there may be some other loss when you make a cost-saving change, it is certainly possible to optimize costs. It’s just not quite as easy as the magical 1% with which we started the chapter.

As we saw, decreasing costs has a significant impact on profits. However, as this discussion of costs has shown, decreasing costs is complex. The ways you might try to decrease different kinds of costs vary significantly. Paying less for your ingredients is different from using less ingredients which is different from using less labor which is different from trying to pay less rent or utilities.

Every successful business owner is focused on keeping costs down, but achieving significant cost reductions in order to boost your margins can be a tall order unless you’ve been lax with costs in the recent past.

And so, at last, we come back to pricing.

Increasing Prices

Why is it that increasing prices has the largest effect on your profits in the example with which we started this chapter?

Increasing prices is the only way to increase your revenue without any increase in expense. If you charge $6.99 for a hamburger instead of $6.39, your revenue increases by $0.60 while your expenses remain exactly the same.

The risk, of course, is that at the new higher price, fewer people will buy.

People will pay your prices if they consider the product to provide as much or more value than the next best option, taking into account their relative prices.

That “value” of course is a thing which is different for different customers and at different times. And the customer always has the option of buying nothing at all, if none of the options provide sufficient value for him to part with his money (or if he simply doesn’t have the funds available.)

We’ll spend much of the next chapter looking at how an increase in your price may cause some people to decide your product does not provide enough value for the money, and thus not to buy. The relationship between the increase in price and the loss of unit sales is called Price Elasticity, and it is something you can measure for your business in order to make intelligent (and profitable pricing) decisions.

But for now, the important thing is what increasing your price does: It allows you to make more money on each interaction with the customer. Each item you sell, to each customer who comes in the door or up the drive-thru, makes you more money without costing you any more than before the price increase.

That makes it the most powerful way of increasing the profitability of your business. It’s just math. Your revenue is the largest pool of money in your business, and if you can increase it without increasing your costs, your profits will go up.

The reason why people do not simply raise prices every day is that if you are not careful, and you increase your prices beyond the value your customers think you offer, you will lose sales and may end up worse off.

Our job, as pricers, is to figure out how to optimize your prices: how to make sure that your prices match the value of your products in the best way to meet your profit and sales goals.

To do that, we need to understand how changes in price cause changes in sales volume. That is the subject of the next chapter.