Jacobo Elosua

The company of strangers

'The Company of Strangers' is a remarkable book written by economist Paul Seabright. 

The book's approach is rather unorthodox in mixing and integrating economic analysis with perspectives from different academic disciplines, such as biology, anthropology or psychology.

A few ideas that stand out: 

1) 'Tunnel vision' (the capacity to play one's part in the complex enterprise of creating the prosperity of a modern society without caring much for the overall outcome) is a skill that was unknown to our hunter-gatherer ancestors. It is a social rather than a biological talent, though it channels powerful biological capacities, and it has developed during the ten thousand years that separate us from the first farmers of the Neolithic era.

2) Two kinds of dispositions have proved important to our evolution: a capacity for rational calculation of the costs and benefits of cooperation, and a tendency for what has been called strong reciprocity (the willingness to repay kindness with kindness and betrayal with revenge, even when this is not what rational calculations would recommend). 

3) Over the course of human evolution on the 6 or 7 million years since our last common ancestor with chimpanzees and bonobos, children have been, on average, very slightly less intelligent than their parents. On the other hand, over the same period, each generation's parents have been, also on average, very slightly more intelligent than the children's grandparents.

4) Parent genes are combined randomly. This fact points towards equal inter-generation intelligence levels. However, genetic mutations are known to be overwhelmingly damaging. Hence, the combined effect of combination and mutation, over billions of children, is to bring average intelligence down. The other explanatory element to take into account is the subtle difference between the terms ‘children’ and ‘parents’. The second term only comprises the selection of individuals who survived and succeeded in reproduction. 

5) Thus, the above-mentioned intelligence-related statements can be explained thanks to the two most fundamental ideas in statistics. Firstly, the law of large numbers states that the average behavior of a large group of similar individuals will be more predictable than the behavior of a small group or any one individual. Secondly, the statistical idea of conditional probability relates to the need to account for what other information we have in making any given prediction.

6) The progressive evolution of a human capacity to exchange goods and favors between unrelated individuals has brought about three significant and defining social benefits: risk-sharing, specialization and the accumulation of knowledge. 

7) Contrary to what one might conclude from the tone of much recent press, globalization and its challenges are not new but a continuation of social developments of at least the last ten thousand years. To manage the hazards imposed on us by the actions of strangers has required us to deploy a different skill granted to us by evolution for quite different purposes: the capacity for abstract symbolic thought.

8) Modern political institutions temper appeals to deep emotions, to family and to clan loyalty, with just enough abstract reasoning to help Homo Sapiens Sapiens, the shy, murderous ape, emerge from the savanna woodlands in order to live and work in a world largely populated by strangers. This experiment is still young, and needs all the help it can get. 

In summary, The Company of Strangers is a though out book with deep and very relevant insights. Without a doubt, a recommendable read. Particularly in these fragile times that seem edging gradually closer to total social unrest.

 

 

Advisory models

When I left UBS Investment Bank in 2007 I had a pretty negative view on advisory. I had spent 10 years walking up the pretty standard professional services ladder. From Analyst to Associate; from Associate to Director; from Director to Executive Director... It is true that I skipped the last step, but looking around me, I never did find a Managing Director whose 'life package' I found appealing. The combinations of job description and life-after-work were simply not that inspiring as long term prospects, despite the very attractive compensation levels.

My view related specifically to financial advisory, the field I could directly relate to, but the evidence drawn from various friends and contacts suggested that the analysis could be generally applied to other advice-based professional services industries, such as legal, fiscal, communications, or strategic consultancy. The key difference being the widely different expected remuneration levels, which I understood related to supply-demand and qualification imbalances.

In 2007, when I set up Ezaro Media, my strategic vision was thus not directly advice-based. I wanted to set up a vehicle to facilitate the establishment of and investment in exciting new digital projects. However, I always felt that during that those 1o years in top-level international M&A and fund raising advisory, I had acquired skills that were invaluable and should be exploited. 

Then, sometime at the beginning of 2010 --I think--, I read Googled, by NYT journalist Ken Auletta. The book was good, but what it gave me was not obvious. The narrative mentioned one Bill Campbell who everyone cited recognized as critical in various aspects linked to the successful development of Google. Funnily enough, reading on how a former Columbia football coach with a lousy record turned himself into a figure whose advice was highly praised and valued, somehow reconciled me with the figure of the 'trusted advisor': focused, human and deeply honest. Those are the three traits I have actively tried to turn into the backbone of my current advisory practice. 

 

 

A dying country?

Spain is edging closer to Greece, or so the world seems to think. It is not difficult to see the reasons: our mounting debt levels (public and, more importantly, private), the sky-high unemployment and the sluggish economic outlook are a fearsome triumvirate. 

Not happy with that, we have a political, economic and financial elite at times clearly not up to the task. Our political system has huge holes in it, like the inability to curb corruption and assign resources effectively, poor democratic legitimacy of key institutions, or the unaffordable and ill-conceived Estado de las Autonomías. 

Entrepreneurship is commonly despised, in what amounts to an awe-inspiring culture of subjection to authority, suspicion towards merit or civil engagement, keeping to one's affairs and leading the easiest life possible. Students typically long to be civil servants and those who succeed often are regarded as exploiting unfair advantages. 

What will Spain be in the future? We have a chance. We can still change the country we live in. Together with Portugal, Spain, or Iberia, would more or less reach the population and size of Europe's bigger players. We have the climate, life-style, doctors and service orientation to become the civilized world's ideal retirement home; we have the artistic flair and performing talent to be able to succeed in all design and digital-related industries; we have the engineers, civil construction and renewable energy expertise to build great infrastructures throughout the world. These are just some examples. We can do things and play a part in this increasingly complex and fast changing world.

What we will not be, and I am willing to bet my hat on it, is the same feeble country dying from the some old and well-documented wounds. Everything tends to make sense in the end, and current Spain plainly does not.

 

Corruption and country model

This morning I participated in an event organized by Fundación Progreso y Democracia. I had been ask to speak about corruption in Spain. Complementing other panelists that focused on philosophical, regulatory and political aspects, my angle has been about technology as a means to fight it. 

You can take different views on corruption and the obstacles that need to be overcome in order to put an end to it, or at least minimize it. What is quite clear in my mind though, is that, at least very least, modern communication technologies are a great weapon against corruption.

Yes, there is a lot of requirements for the fight against corruption to be ultimately successful. Legal reforms need to be put in place, our citizenship needs to take a more active role demanding political accountability, the media need to engage in different ways to produce a new breed journalism that tackles old problems... All that is true, but technology is the great lever to make it all happen.

Affordable and accessible technology enables the design and development of apps and functionalities through which data can be assembled, matched with other data sets and analyzed.  From that point there is only one step towards generating that fact (and not source) based journalism that we are longing for. Will that not help mobilize citizens in their demands for greater transparency and accountability? Will this not, in its turn, apply significant pressure for those much needed legal reforms to be put through parliament?

I, for one, believe that is a compelling case. At times it seems some of us spend all our time thinking about business models, and no one ever focuses on country models. This week I read a brilliant article which gave a positive turn on what the current situation means for Spain: we have the talent and the unusual conditions (high unemployment, good weather, stimulating lifestyle, - and excessive real estate capacity, I dare to add-) that could push a great wave of tech start-up based all round transformation.

Will we be, as a society, smart enough to realize it and make changes happen? It remains to be seen, but soon we will face our very own day of reckoning, I am afraid. Is it not the time to be innovative and give it a real try?  

Ashoka in Spain

Over the last few weeks I have been in touch with the Ashoka team here in Madrid. I have considered myself a big fan for a few years now, so I was really pleased to be able to meet the actual people behind the institution.

I first heard of Ashoka in 2005, when the press reported on President Rodríguez Zapatero handing a copy of David Bornstein's "How to change the world: social entrepreneurship and the power of new ideas" to his cabinet ministers. <voice_over> See, even ZP has good things to be remembered by... :) </voice_over>.

It is not often that one has the chance of lending a hand, tentatively at least, to a group of highly talented and self motivated individuals trying to bring about social change through the use of the little known --at least in Spain-- tool of spearheading social entrepreneurship. 

Ashoka has been gaining increased recognition for its good work world-wide and Bill Drayton has received a number of prestigious awards, but there is still a lot to be done in order to help Ashoka establish itself firmly in our coutry. I am really glad that I will be trying to contribute to this wonderful effort in the coming months. 

2011 in review

Certainly this has been a good year. My friend Arcadi Espada has made some good remarks trying to hammer the point home.

Good overall collectively doesn't mean good throughout personally though. In 2011 I have endured my first major sentimental loss. My father, Enrique, passed away in June. His illness gave us the chance to mentally prepare for that final goodbye,  but, in retrospect, I now feel you can not really prepare for something as bitter as that, can you?

On the positive front we have become a 'familia numerosa'. With the birth of Rosario (Rorró),  the offspring count reached three.  A good number to call it a day, we feel. We are tremendously lucky and look forward to life as a tightly-knit, loving and respect-driven family. Some dear friends have gone through rocky times this year. Luckily the worst seems to be behind for all of them.     

Professionally, 2011 has been very interesting. I have complemented my traditional financial advisory activities with a much deeper inroad into early stage technology investing. I hope 2012 will be the year when I can establish a true position as a professional investment manager. You know what they say: time to put your money where your mouth is! 

This has also been a year to develop a deeper understanding of open data and big data, with all their implications. I feel CIVIO (more to be announced soon) will be the most fascinating project in which I have embarked myself to date. My buddies in this adventure are really top class. CIVIO combines a number of dear and old passions: civic and political engagement, transparency and facts as a quasi-comprehensive world view, web technology as the great enabler, and a penchant for the generation of quality visual and analytical contents.

But to be able to avoid past mistakes, we will need to think long and hard about entrepreneurship and financial sustainability. Can we pool all the relevant skills or do we need to find more partners? Individual or institutional?  For-profit or non-for-profit?  This means that the picture will still need some redrawing. Be sure to find more on this and other topics here in 2012!    

The birth of CIVIO

In just a few weeks we will officially launch CIVIO, the civic foundation we hope wil spearhead the design and develpment of exciting new transparency and e-participation related apps.

Our long term goal is to  foster a community around these new apps to help generate relevant analytic and journalistis contents to inprove the quality of our democracy.

Spain has long been lacking a rich ecosystem of engaged civic entities to empower its citizens with the enormous potential of new technologies. CIVIO will modestly try to advance in this direction.

It promises to be a very exciting journey! There will be more news soon.

 

Why programming now?

Yes, why programming indeed? As a business, law and economics major educated in Europe during the 1990's, I was taught to look down on programmers and the content of their jobs. A plain vanilla commodity, they told us. Business (and business related) backgrounds were the brains of the operation. Or at least they were meant to be.

You did need to learn a thing or two about mainstream software packages from an end user perspective. Sure thing. But dealing with code and the insides of how computers actually work, that was geeks' stuff. Programming was depicted as some sort of modern plumbing. No money and no real future in it.

Obviously things have changed quite substantially. It never did sound too reasonable that a few pretty brainless business courses was the making of the world's future entrepreneurs, whilst spending a good number of years learning very demanding computer engineering modules was possibly the only reasonable professional way out for the socially inept.  

The age of communication technologies has just made it all the more obvious: it is the other way around! Business --classroom business-- is for dummies. All the exciting stuff is happening over there, in geekland. If I were  now trying to decide how to play my university studies, I'd have no doubt: a computer engineering major with a bit of 'businessy' varnish on top, or possibly a top notch MBA a bit further down the line.

Too old to try to make amends now? I honestly don't know, but over the last couple of months I have made my first serious inroad into HTML, CSS and Javascript programming. The goal is to be able to tackle professional visualization packages in the not too distant future. Will it yield me some tangible results? Too early to tell. Possibly not directly. But I am convinced that it will be worth it, if only  to be able to interact with the real pros from a platform of at least a minimal degree of common and shared knowledge. Anyway, the most important thing is that so far it has actually been a lot of fun. Mental note: let's try to keep it that way...  :)

Jordan or McEnroe?

I have been reading a fascinating book on how to approach entrepreneurship. The title is 'Little bets' and the author Peter Sims. The main thesis is that breakthrough ideas most often originate from small discoveries, i.e. innovation can be guided through methodical experiments.

In one of my favourite bits, the author cites reasearch according to which effort-based encouragement is a lot more effective than talent-based encouragement. The former drives measured risk taking and the right mental attitude towards challenges. The latter, on the contrary, ego preservation.

If effort is what counts, the actual new task is not that important, no matter how daunting. However, if the  focus lies on talent and excelling, every new challenge can easily be perceived as a threat. Lowering the adoption of new risks (living in the confort zone) is thus a much more natural course of action.

Focusing on personality types, Sims builda a ranking with Michael Jordan sitting at one end and John McEnroe at the other. Jordan was a risk taker, thriving for continuous improvement throughout his career (his alll career shooting average was significantly better than during his first four years, is one example provided). McEnroe, on the other hand, was an undoubted talent, one the greatest, but he easily lost his balance when faced with difficulty. His tendency to blame others is read by Sims as a good example of the wrong way to go about things.

The good news is that apparently having the correct relationship with risk taking is a skill that can be gradually learnt. So don't lose hope on becoming an effort-focused and continuously-improving innovation champion, even if you don't see a Michael Jordan --or a mere Javier Villarroya... :)-- when you look at the mirror.    

 

 

Life at 37

That time of the year, again. And a good one to reflect it is.

In 2006 I underwent a serious life changing episode. I spent over three months in hospital, very ill, hanging in the balance. In the end, thanks to my family's support and the wonderful medical attention received, I managed to make it through.

The change in perspective that such an event entails is hard to explain. There is vertigo, regrets, fear, and, of course, also an incredible amount of positive energy released. I felt like I had to do a million things, and all of them at once. Like somehow I owed it. To whom? Difficult to say. Before 2006 I distinctly felt that I was about 10% accomplishments and 90% potential. Not any more since then: the clock started ticking.

Over these past five years I have accumulated a lot of experience in various fields. Professionally, as an entrepreneur, I have had exposure to TV production and digital journalism. I tried my luck, followed my instincts, invested heavily... and failed. Twice. The reasons? A combination of factors probably. Although my perspective is clearly biased, two common themes emerge from the analysis: arriving too early and not finding all the right partners. Both big, damning mistakes. Recently I have found a more balanced profesional approach, advising and investing as well as launching my own projects.

As a citizen, I have also really gone for it. Right after leaving hospital I joined a newly-created political party: Ciudadanos. The founders, their diagnosis, the reform agenda proposed, even the name was just perfect! Over the following months I became increasingly engaged, I always found the extra hours to contribute. In the end, somebody else capitalised on our early work. Best of luck to them! I have transitioned from abstentionist, to militant, to now simple (and proud!) voter. Through non-for-profit efforts such as Voota or Pro Bono Publico I continue to channel my civic unrest.

I have also continued writing: articles, novels, essays and scripts, both in English and in Spanish. But I remain too shy, somehow vulnerable, to really give it a shot. It is as if I devote just enough time and energy to enjoy what I do without being subjectable to proper criticism. A bit childish, I guess. The whole thing remains WIP.

Most important of all, I have also evolved as a person. I value, more than ever, my marriage to Noelle. She is the person that has made me into who I am today, more than anyone else. A true example in so many aspects. I love her and I admire her for being the wonderful person that she is. Only days away from the birth of our daughter,  I celebrate that Mateo, Tomás and Rosario will increasingly become the center of our lives. 

Then there is everyone else I love. Last June I lost my father, also due to a terrible and cruel medical condition. I can't stop thinking that his progressive physical deterioration was some sort of exacting toll he was asked to pay in exchange for the 'extra life' granted to his eldest son. Stupid, I know, but real nonetheless. I feel him very close, still watching over all of us. Family and friends. I have never valued the time I spend with them so much: my brother, mother, other relatives, good friends, etc. They all help me live for today and I thank them for it.

So, what now? As in the Sinatra version, I can honestly say that I have done things my way. I didn't like what I saw around me and have tried to change it, in politics, the media and society in general. Little success so far... Is now the time for a cozy retreat? Fortunately, to a large extent I have the financial resources to be able to afford it. A life of enjoyment and contemplation. Tempting... But the answer is no. Not in a million years. I am not wired like that - not 100% anyway... :)

New (and not so new) projects will soon crystallise, I hope. I need to learn new things. It continues to give me a very big thrill... As always, all I am sure about is that I will commit and give my best to whatever I endevour. Let this be my personal contract with myself and those who I share my life with. A small, and poisonous, birthday present!

Here goes a more innocent one: