David

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2013 SD conference Boston photos: Monday morning

International System Dynamics Conference July 22, 2013

Photos from the presentations and the poster session on Monday, July 22, 2013, at the 31st International Conference of the System Dynamics Society in Cambridge, Massachusetts

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Venture capitalist reveals how a startup can get a positive feedback loop rolling before time runs out

A positive feedback loop is important to the growth of any business. But having a good product alone is not enough to ensure your success. So, what makes the difference between successful exponential growth and failure into obscurity?

Paul Graham, co-founder of the venture capital firm Y Combinator, explains with “Do Things That Don’t Scale“:

A lot of would-be founders believe that startups either take off or don’t. You build something, make it available, and if you’ve made a better mousetrap, people beat a path to your door as promised. Or they don’t, in which case the market must not exist. […]

It’s not enough just to do something extraordinary initially. You have to make an extraordinary effort initially. Any strategy that omits the effort—whether it’s expecting a big launch to get you users, or a big partner—is ipso facto suspect. […]

Over-engaging with early users is not just a permissible technique for getting growth rolling. For most successful startups it’s a necessary part of the feedback loop that makes the product good. Making a better mousetrap is not an atomic operation. Even if you start the way most successful startups have, by building something you yourself need, the first thing you build is never quite right. And except in domains with big penalties for making mistakes, it’s often better not to aim for perfection initially. In software, especially, it usually works best to get something in front of users as soon as it has a quantum of utility, and then see what they do with it. Perfectionism is often an excuse for procrastination, and in any case your initial model of users is always inaccurate, even if you’re one of them.

Graham’s examples of successful growth include the once fragile startups Airbnb, Facebook, Meraki, and Pebble, some of which became billion dollar businesses. The article is definitely a good read if launching a successful product is your thing.

Hey New York Times: a causal loop diagram is not a PowerPoint fail

You don’t often see System Dynamics in the news. It was interesting to see a familiar looking diagram in the New York Times, presented as a jarring example of the military’s inefficiency.

This causal loop diagram, created by PA Consulting Group in 2009, summarized a snapshot of U.S. military’s plan for “Afghanistan Stability / COIN Dynamics”:

The New York Times cites this image as a very, very confusing PowerPoint slide.

New York Times cites this image as a very, very confusing PowerPoint slide.

But alas, in the wrong hands, the comprehensive causal loop diagram was interpreted as misuse of government resources.

In a front page New York Times story, writer Elisabeth Bumiller, who mistakenly thought the causal loop diagram was made with PowerPoint, blamed the Microsoft software in “We Have Met the Enemy and He Is PowerPoint”, published in April 2010:

Gen. Stanley A. McChrystal, the leader of American and NATO forces in Afghanistan, was shown a PowerPoint slide in Kabul last summer that was meant to portray the complexity of American military strategy, but looked more like a bowl of spaghetti.

“When we understand that slide, we’ll have won the war,” General McChrystal dryly remarked, one of his advisers recalled, as the room erupted in laughter.

Yes, a causal loop diagram can seem overwhelming without explanation. So is any engineering diagram without explanation. But if you are a System Dynamics practitioners, you would know that the creator of the slide would have provided additional slides that explained the diagram in detail.

COIN Dynamics Stock flow diagram

A stock and flow diagram!

The image even contained a small stock and flow diagram, so perhaps there’s a System Dynamics model behind it.
How could a system dynamics expert prevent this miscommunication? Findings from a model are not effective if they get lost in bureaucracy.

As of now, when you search for “Afghanistan Stability / COIN Dynamics” you can find a 31-page PDF. PA Consulting, the company ridiculed for this “PowerPoint fail,” did not publish these slides – MS NBC did. Other than this, none of the top three pages of Google results linked to anything that explains the context of the confusing “spaghetti” diagram. One of the top results was even titled: “PA Consulting Produced Joke Afghanistan Strategy PowerPoint.”

The full set of draft slides actually provides sufficient explanation to avoid confusion.

The presentation starts with a stock and flow diagram and an explanation of the overall goal of the Afghanistan stability / counterinsurgency operation. With each new slide, you see new variables of the causal loop diagram, along with annotations. By slide 22, the complete model appears. The following slides highlight and explain the key feedback loops of the complete model.

I am surprised that none of the top search results explained causal loop diagram and its step by step explanation process, even though many people in the SD field knew what it was.

Out of all the top comments in the NYT story, there was only one mention of System Dynamics. It was written by user Len from New Mexico, who I believe is Len Malczynski of Sandia, a well known expert in the SD field:

“PowerPoint was the medium. System Dynamics was the methodology (look it up). Blaming PowerPoint is tantamount to blaming a piece of paper that has your dismissal notice on it as the reason you were let go!

Blaming PowerPoint is of course the response to our inability to understand situations as complex as Afghanistan. None of us was privy to the process that created the diagram nor the learning and understanding that went into it. Where are all your Afghanistan solutions?”

Besides the NYT comment from Len, viewable only halfway down on a separate page, I did not find any rebuttals for this story in the mainstream news. Neither New York Times nor PA Consulting published any corrections as of today, three years later.

The fact that this story can go almost uncorrected for three years points out a potential opportunity by the SD community.

There are many exciting things happening in the System Dynamics field, but the findings are usually published in very specialized academic journals. Or, in case of consulting work, the client benefits from the custom built model but there is not enough publicity.

There’s a lack of current information that can bridge the gap between scientific journal articles and evening news sensational journalism.

Update July 24, 2013:

I talked to a PA Consulting representative, who said in some cases they do work with the client to publish papers. However, due to confidentiality agreements, they do not comment to the press.