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Innovation and Happiness

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What, exactly, is value? Or, in a less philosophical way: how is it that you practically know when you have experienced something of value?

From my experience so far, I believe that our experience of value is deeply related to our true emotions and feelings, and is thus rooted in our common humanity. Building on what I’ve written about previously on innovation (innovation being the simultaneous movement towards new and better) our entire perception of “value” and “better” is inextricably intertwined with our emotional experience of our world. In this perspective, being able to make ourselves happy is a precondition to being able to make others happy, and this includes how we craft products, services and experiences for others.

Let me explain.

Our Emotions

We, as human beings, have a limited number of emotions that we can experience and that motivate us to action. Opinions differ as to what those emotions are, but one popular perspective is that they include happiness, anger, fear, sadness, disgust, guilt and surprise. As practical experience tells us, we can experience these emotions to different levels of intensity. We can also experience several emotions simultaneously, because our brains are highly complex, interconnected webs of living cells, all interacting simultaneously.

The regions of the brain that deal with emotions are quite close to the centre of the brain – closer, in fact, than the regions of your brain that are responsible for our rational, critical thinking processes. The centre of the brain is, of course, closer to the mid-brain and spinal cord, and, thus, it can be conjectured that emotions are more powerful movers of our selves than our rational thoughts. Think about this for yourself: are you more likely to be moved to action by an appeal to your emotions, or by an appeal to your logic? Are you very easily able to commit and see through your New Year’s resolutions, or do you give up on them within a few short weeks (like most of us)? I suppose the answer to that will depend on how much discipline you have over your emotions, and how in touch you are with your emotions.

How dull would life be if you only lived by way of logic, ignoring all of your feelings of happiness, sadness, fear, anger, and so on? Emotion and logic both have their place in our daily lives, and wisdom involves knowing which to give precedence at the right time.

How is it, though, that emotions could possibly lead us to experience what we deem to be “valuable”?

Emotions and Value

What are the things that facilitate happiness for you, personally? Are those not the things that you consider valuable? Tony Robbins speaks of the things that motivate us as human beings, listed here for convenience:

  1. Certainty/safety – I need to feel safe now, and that I will feel safe in the future.
  2. Uncertainty/variety – I need to experience new things and encounter unexpected challenges or experiences (note how this contradicts our first need).
  3. Significance – I need to feel as though I am significant to another person.
  4. Love/connection – I need to feel as though I am loving others and am loved by others, and/or connected to others.
  5. Growth – I need to feel as though I am growing and developing as a human being in all of my various spheres.
  6. Giving – I need to feel as though I am giving back to others in a meaningful way.

The first four needs are basic needs that everyone has and will find some way of meeting, regardless of how healthy or sustainable those ways are. Very few people seem to get to the point in their lives where they realise that they need the last two things: to grow personally, and to give to others. It is, in fact, a need of ours to give to others in meaningful ways! This is, however, quite difficult if you have not yet found healthy ways of having your other, more basic needs met first.

The degree to which we experience those different needs is different for each and every one of us. Some of us need more variety and uncertainty or excitement than others. Some of us have a greater need for significance than others. And others still have a greater need for personal growth. The intensity of each of those needs also varies over time, depending on what’s going on in our lives.

Think, for example, of a situation where, on a rather average day at work, you feel hungry. You start looking around for new something to eat at the cafeteria (it would be “valuable” to you right now to ensure your own longevity and satisfaction by eating something, but you also want a bit of variety), when all of a sudden the fire alarm goes off and people start running and screaming around you as smoke fills the corridors. Immediately, your priorities shift to a different kind of bodily safety or certainty. The last thing you’d probably be thinking of right now is food, or, for that matter, connecting with other people in meaningful ways or about your career growth path (if you’re laughing at this picture right now, it most certainly highlights the practical absurdity of thinking of inappropriate needs for the situation). Your immediate perception of what’s “valuable” shifts to preserving your own life, and you too probably start to run towards safety.

Similarly, your needs shift and change as you go through different phases of your life. When you are young and unattached, you generally have a greater need for uncertainty and variety – to go explore the world and its various options. The moment that you start to “settle down” and start having children, your priorities may start to shift a bit more towards providing you and your loved ones with greater safety. As the children leave the house, you may start once again engaging in hobbies that you have neglected for a long time, and perhaps go back to school, as growing as a person again becomes a focal point for you. As you grow, you also start realising that you have a desire to give back, and so start volunteering at a local shelter, or volunteering to teach others. (This is, of course, a highly stereotypical view, and is not necessarily the healthiest approach to life – that is up to you to discover for yourself).

In all of these examples, it is in the meeting of these fundamental needs of ours that we experience what we intuitively call “value”. That is, of course, given that we’re doing so in healthy ways. And how is it that we know that these needs of ours are or are not being met? Through our emotions, of course! We usually tend to feel happy once our needs have been met, and happily surprised when met unexpectedly. We tend to feel angry, sad or disappointed, or disgusted when they are not met. We tend to feel guilty when we act in ways that hurt others and go against the meeting of our own needs. (An important caveat here: this is not always the case though. When we come from dysfunctional relational backgrounds or have experienced a lot of pain and suffering at the hands of others in our past, our emotional responses to the world need to be taken with a pinch of salt. Psychotherapy is an incredibly effective tool in helping to sift our true feelings/emotions from those generated by PTSD).

Meeting Our Own Needs

Part and parcel of our highly dysfunctional society today is the lack of being able to meet our own needs in healthy ways, while trying to meet the needs of others, thinking that if we meet their needs then they’ll meet ours. This is a particular pattern of dysfunction that sets in in early childhood when parents cannot meet the needs of their children, and children assume that they have to teach their parents to how look after them (an oversimplification of codependency theory, I know). Unfortunately, their parents are so disconnected from themselves and their own emotions that there is no way that they would be able to be in touch with the emotions of their children. Children then preoccupy themselves with their external environments and external distractions, never really learning to be in touch with their own emotions, and so the cycle is perpetuated through the generations. As adults, we preoccupy ourselves with trying to please everybody around us (colleagues, managers, friends, partners) so they will like us and maybe, just maybe, they will help us meet our needs. Unfortunately, meeting one’s own needs is a full- time job for one person, and so the chances of them catering to your needs will be very slim.

This pattern of dysfunction is incredibly common nowadays, and is especially evident by how much codependency, addiction and abuse (physical and emotional) there is in the world today – our world of endless, instantly available distractions. We need to bring ourselves to a standstill, before life does this on our behalf in the form of catastrophe, and recognise that we need to take up full responsibility for having our own needs met and for our own happiness. This, of course, does not mean that we have full control over having our needs met, such as in the example of connectedness and love, where one cannot possibly control another person into loving you or being friends. All we can do is adjust ourselves, and rationally put ourselves in the best position we can to be able to have those needs met, and then be okay with being dependent on another person as they could be on you.

I say all of this because, before we can actually give back to others in meaningful, healthy ways, we have to be able to give to ourselves in healthy, meaningful ways.

Innovating Through Empathy

Once we are regularly in touch with and can meet our own basic needs by creatively coming up with ways of finding happiness in healthy ways, we can then start to look at meeting the needs of others in healthy ways (which, as said earlier, happens to be one of our own personal needs). By being in touch with oneself, knowing oneself and how to work with your own emotions, you can build up your ability to empathise with others. This allows you to feel what they feel, as if you were in their shoes. By being well-versed in looking after yourself and your own needs, you can then more easily help them find ways to have their own needs met.

This is especially relevant and pertinent in a business context. If we, as individual human beings (who happen to be employees as well), are out of touch with ourselves, how could we possibly be crafting products, services or experiences for other people that will make them happy enough, by way of having their needs/desires met, that they will pay you their hard-earned money and keep coming back to you for those offerings?

Coming back to the idea that innovating is about the simultaneous movement towards things that are both new and better, there is the underlying sense that it requires both creativity and an understanding of what’s valuable. Thinking only about the value/betteraspect, my reasoning, as explained above, is that being in touch with your own emotions as guides as to what’s valuable to you will allow you to come up with ways of structuring your life to facilitate greater happiness for yourself. This is the primary way in which you will be able to empathise with others and help to give them that which is valuable to them.

Conclusion

It would appear to me as though innovating on behalf of others and our own personal happiness and fulfilment are inextricably interwoven. We cannot separate our humanity from the business world, because our business, as human beings, is the business, challenge and art of finding and facilitating happiness in a challenging, dynamic world, for ourselves and others. The way in which we help others find happiness through our products, services and experiences, is for us to first find ways of making ourselves happy – a journey on which our true emotions and feelings will be our guides.

Commit yourself to making yourself happy, and being the only person in your life who is truly and ultimately responsible for your own happiness, and you will see that, within a few short months, you will be more capable of seeing what’s valuable for yourself and others. You will also be more capable of facilitating the happiness of others in healthier, more sustainable ways, and in so doing meet your own need to give back to others.

The rest of the challenge of innovating is in being able to facilitate the “new” – a topic which most certainly deserves its own special treatment.

About the Author

This article was written by Thane Thomson, who is currently working for DStv Digital Media in research and development.

Entrepreneurship

Top 10 KPIs for your Tech Startup

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Key Performance Indicators (KPIs) are data points that measure your company’s performance. They help you answer specific business questions such as:

  • Is the business financially viable?
  • What is working well and what needs to be improved?
  • What is driving customers to purchase your products?
  • How can the company improve its profitability?

Let’s look at 10 KPIs that are useful to track for ecommerce, marketplace and SaaS based businesses.

Monthly Active Users (MAU): This demonstrates how many users visit your platform, website or service every month and are “active”. That could mean they engage with the blog, click on the pricing page or interact with the contact form. This is done by the number of users that visit your platform in a certain time period (albeit monthly in this case). For an ecommerce company like Drover, a peer to peer marketplace for leasing cars to drivers, seeing the MAU increasing means it is attracting new users to the platform.

Conversion Rate (CR): According to BigCommerce, even if you are doing everything right –  you’d only expect to make a sale only 2% of the time. Clearly there are ecommerce companies that exceed that, however. Conversion rate can be calculated easily, as per the below:

Conversion Rate: # of sales / # of visitors

Provider to Consumer Ratio: This is important when tracking the growth of a marketplace business. This is defined as the number of customers a single provider on the supply side of the marketplace can serve. This varies radically across different marketplace businesses, according to Phil hu: AirBnB 70:1, Uber 50:1 and eBay 5:1.

Average Order Value (AoV): AoV is crucial to determine how much revenue you can generate over time. This describes the average size of an order on your platform. Naturally, the higher the average order size the better.

Customer Acquisition Cost (CAC): This is a single most important metric that runs across most business models. The amount it costs to acquire a new customer. Ideally, your CAC should be zero – that is every new customer is referred by another potential customer or customer base grows organically. However, that is rarely possible. To bring new customers onto the platform, you’ll have to spend some money. It is really important to track this over time, and see by how much you’re able to decrease it.

Customer Lifetime Value (CLV): This represents the total amount of revenue that you expect to get from each customer. To calculate the CLV, it depends on how long the customer is retained on the platform, how many repeat purchases does the customer make and what is the average order size. To get a general idea, CLV can be calculated based on the average order value multiplied by the average number of repeat purchases per customer.

Churn Rate: This metric measures the number of customers your platform loses over a given period of time (daily/monthly/annually). Churn rate is critical for SaaS based businesses, where customers pay subscription recurring payments. If the churn rate is high, clearly it means the customer base is unhappy.

Monthly Revenue Rate (MRR): MRR describes the predictable revenue stream of your platform. To calculate MRR, you need to understand the total number of customers per month, and know how much revenue does each customer creates, as per the below:

MRR = Amount of revenue per customer * Total # of customers

Contribution Margin (CM): Contribution margin is the margin that is left after you deduct all variable costs of producing the product or service from the total revenues. A common mistake entrepreneurs make is lumping fixed costs of building a product or service and variable costs together and deduct that from the revenue to understand profit. However, fixed costs remain permanent in the business, no matter how many products or service you produce, it is the variable costs (such marketing spend) that you can change in your business. Some of the most common ways to use the CM is to understand which products or services to continue building and which ones to kill or how to price the products or services.

Net Promoter Score (NPS): This is a great metric to understand if customers are likely to refer you to other users such that your platform can grow organically. To calculate NPS you must ask a specific question:

How likely is it that you would recommend [brand] to a friend of colleague?

And ask the user to answer with a number between 0-10. You can read more information about tracking NPS in this guide here.

Customers that give you a 6 or below are Detractors, a score of 7 or 8 are called Passives, and a 9 or 10 are Promoters.

To calculate your Net Promoter Score, detract the percentage of Detractors from the percentage of Promoters. It is that simple. So, if 50% of respondents were Promoters and 10% were Detractors, your Net Promoter is a score of 40.

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About the Author

This article was written by  of the  Path Forward. The Path Forward was developed by Forward Partners, a VC platform that invests in the best ideas and brilliant people. Forward Partners devised The Path Forward to help their founders validate their ideas, build a product, achieve traction, hire a team and raise follow on funding all in the space of 12 months. The Path Forward is a fantastic startup framework for you to utilise as an early stage founder or operator. The framework clearly defines startup creation as being comprised of three steps. The first step of this framework involves understanding customer’s needs.

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Entrepreneurship

Fear & Desire with Emerging Technologies

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For all their complexity, we tend to think about emerging technologies in surprisingly simple ways. Either they are a force for good. That is, for eliminating disease and pain, and offering the prospect of not only extending our lives but bringing a level of physical and cognitive enhancement that even the previous generation could not have imagined. We get a sense of the apparently limitless power of artificial intelligence to help us grapple with the widest array of personal, social and physical problems, especially as we apply it to the massive and growing resource of Big Data. And we particularly enjoy the expanding connectivity that comes with all this.

Or we see them as threatening, especially as artificial intelligence increasingly makes important decisions for us, as that same connectivity is used to exploit us and as it distorts our view of the world, and as genomics explores and alters the very codes of life. They are also seen as a threat to the ecosystem through the toxicity from mining rare metals, from the gases and microplastic waste from modern appliances and through the dumping of ‘old’ technologies as the replacement cycle shortens.

Or, even more commonly, we see them as being all of this, leading us to think that all we have to do to enjoy all the benefits is to constrain the risks they pose. A comfortable trade-off, a pact of some kind.

But the story of emerging technologies may be far more interesting than this, especially if we ask questions that have not been asked before. Why is it that this ‘fear and desire’ relationship that we have with technology seems to echo a similar ‘fear and desire’ relationship that we and our forebears have had with God, with the State and even with the large corporations of the Market? Do we have – or have our forebears had – a fear of these but also a desire that the power that causes this fear be brought to bear to create sympathetic conditions for us? A series of powerful protectors and providers? Is that not similar to the relationship we are increasingly having with the new technologies? If we can see some resonance here, doesn’t that change how we should think about technology? What further questions do we then need to be asking about how this relationship works?

Technology and the Trajectory of Myth answers these and other questions. It identifies the nature of the dynamic that drives this relationship and presents evidence to show that such a dynamic has long been in play, not just with the new technologies but similarly with those ‘magnitudes’ of Deity, State and Market. This evidence is found not only in the respective fields of those magnitudes but also in science, the legislative process and in law more generally. All this allows an argument that the magnitudes have formed a trajectory that has shadowed the history of the West from the start, a trajectory in which the new technologies are a key factor in the occupation of the space previously and sequentially occupied by those magnitudes.

This dynamic is proposed as a combination of psychology and history, which not only explains the relationship between individuals and the magnitudes across this trajectory but which argues that this relationship is strongly present today. The idea of it was drawn initially from the account of mythology presented by the German philosopher Hans Blumenberg but it has then been extended and widely re-worked. The result has been the imagining of this series of magnitudes as mythological entities, the purpose of which is to deal with the pressing and persistent existential fears and desires that all individuals experience. These magnitudes are claimed by their respective dominant interests to be not only absolutely empowered – they must be so to cope with the absolute nature of those existential experiences of individuals – but which have had that fearsomeness engaged to create sympathetic conditions for each individual.

The condition on which all this relies is the full subjection of the individual to the regime of idea and practice of each such magnitude in their respective eras. In fact, it is that subjection which fully empowers the magnitudes. The outcome is that, ironically perhaps, each absolute magnitude is ‘brought to earth’ by its conversion into a sympathetic form, with its power moving from absolute to conditional. The consequence of this loss of absolute status is then a search for a replacement absolute magnitude. These successive creations and failures – which see each magnitude descend into a field of failed but persistent magnitudes – constitute the trajectory. Within this field there are competitions and alliances as the dominant interests of each magnitude seek its re-emergence into an absolutely powerful condition. The operation of this field is a way to understand, for example, the contemporary alliance between the Market and both the State and emerging technologies.

This leads to the end point, the point of our present condition. That is, that technology can only take its place in this trajectory if it acquires an absolute form. We can see this emerging in the claims that technology will fully empower the individual as an Absolute Subject. Unlike the secondary position that the individual occupied in relation to the earlier magnitudes in their absolute condition, such an individual will be empowered to deal conclusively with her own existential fears and desires.

So we come back to the point at which we began. That is, the common view that technology should be seen as comprising contradictory utopian and dystopian features and that the former will be realised if the latter are eliminated or severely constrained. In fact, both features are together essential to this story of modern mythology. We need technology to be fully empowered – thereby fearsome – so that claims can be made that it will deal with the absolute existential condition of each of us. This to be done by the full power of technology in which we are to be embedded as Absolute Subject and by which each of us can create absolutely sympathetic conditions for ourselves. Utopia and dystopia need both to be brought into the context of the modern mythology not as contradictory elements but as working parts of the mythological dynamic.

But that is not the end of the story. As we have seen, the relationship between the individual and each of the magnitudes of the trajectory is based on a subjection which is best understood as the foregoing of responsibility for oneself. To recapture this self-responsibility – and experience the respect which accompanies it – means to reject this subjection. This in turn means opting out of the mythological way of organising both our sense of self and our social arrangements and dealing with existential concerns very differently, respectfully and in radical self-reliance.

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About the Author

This article was produced by Elgar Blog, Edward Elgar Publishing‘s blog is a forum filled with debate, news, updates and views from our authors and their readership. see more.

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