Failure and Progress: April 2023

Hey everyone! Welcome (back) to my monthly summary of learnings and experiences, culminated into one newsletter. This is my space to provide you, the reader, with the things that I’ve found valuable, in the hopes that they’ll help you, too.

My name’s Alex, and I’m a 17 y/o builder. I’ve worked on projects in AgTech, Wireless Electricity, and Batteries. I also ponder on philosophy, learn languages, and ideate the future of the world.

Here’s what I’ve been up to over the past month:

San Francisco’s Homelessness, Toronto’s Housing Crisis, and the Indian Insurance Market

I’ve been working exploring different problems in the world with my friends Pavi and Tobias. When we looked at the problems that existed in the world and which of them bothered us the most, we settled on San Francisco’s homelessness epidemic. We were surprised that one of the world’s premiere destinations for tech innovation was also a place where thousands of homeless people roamed the streets.

As we talked to people on the ground, it became obvious that it was a policy issue. From the perspective of three young people, it seemed impossible that there couldn’t be some sort of private, for-profit solution. But the more we talked to experts, the conversations kept reverting back to what the city was doing to tackle the problem, rather than private institutions.

This is due to two factors: funding and business models. Cities have much higher budgets to get things done than what most companies could ever raise, which opens them to a variety of options that simply wouldn’t be available to anyone else. But they’re also not a for-profit company — they don’t need to repay the money they use, which means that they don’t have to find solutions that would make more money that they consume. While opening a charity or NGO for the homeless sounds nice, it seems ridiculous (to me, at least) that one should continue to rely on funding from the kind-heartedness of a government or wealthy benefactor.

The issue with this problem is that it’s not obvious how to monetize it. If you transition people off of drugs and alcohol, provide them with a home, and help them create a positive mental state, it sounds great. But they’re not going to pay you for it. Apart from that, it doesn’t sound fair to take a portion of their lifetime wages or to build a ‘mental-health gathering place app’ to help them with the very real issues of drug abuse. So, we pivoted.

It turns out that addressing a housing crisis isn’t particularly viable, either. That is, at least, if you’re in the business of providing affordable housing to the average Canadian. The current median price for a house in Toronto is $1.27 million, while the 2001 median was at $251,000. That’s a 5x increase over the course of 22 years, and salaries haven’t kept up with that pace. You need to be making at least $200,000 if you even want a chance at buying a house, which is simply unattainable for most Canadians.

As we looked into different ways that we could address this issue, we found alternatives to current construction methods like wood framing for condos and modular housing, but these didn’t alleviate the issues of the price of the land itself. They likely would help, but not enough to make a significant impact on the price of the average home.

After calls with people working with the city of affordable housing, it again came down to the policy that the city was adopting. There aren’t strict regulations about affordable housing development, land developers are able to build higher than ever while charging more per unit, and there aren’t enough workers to continue new builds. Labor is an especially vicious cycle — there aren’t enough teenagers entering the skilled trades, so we rely on immigration to fill the gaps. But all those immigrants need a place to live, and they can’t build more houses until they find one, causing home prices to grow ever higher.

This was an issue that did have some interesting economic undercurrents to it, but they weren’t enough to make a tremendous impact. So we pivoted, again.

We landed on the problem of insurance. It’s a problem that has financial incentives built into it. By offering people financial compensation in the face of a particular event occurring, you’re receiving some sort of payment. When we examined the insurance market globally, it was clear that Western markets were pretty well saturated, and yielded billions of dollars worth of profit annually. But when we examined a global markets, we saw that there was a large gap in most developing nations. For many of these places, insurance is still a nascent concept, which means that there’s still room in the market to take capitalize on.

When we looked at potential markets, we chose to focus on India, given its large population and the rapid socioeconomic progression of its people. With more than 160M households entering the middle- and high-income earners brackets by 2030, insurance uptake is going to increase substantially. India already mandates motor insurance federally, making it quite popular along with health insurance. However, home insurance penetration is still under 3% (compared to the U.S. at 90%). If India is to progress anything like Western nations, there will be a huge need for better home insurance policies.

One of the reasons for the low uptake of home insurance is the fact that traditional insurers don’t meet the needs of the people they’re insuring. Their policies are too expensive (the result of a large corporation), and include coverage for items that the consumer does not need.

We think that leveraging a digital platform, cost-saving measures like AutoGPTs for underwriting and customer service, a reduced need for tedious corporate documents, and modular insurance policies will enable insurers, whether old or new, to better serve their customers and access a market vertical that has gone untapped up until now. You can read the entire memo here.

The Takeaways

One of the things that my mentor Brandon noted is that we’re not skilled at picking the right problems to work on, which leads to wasted time in the exploration stages of a project. This is a function of time and experience, but he shared a useful heuristic that may be used to validate whether or not a problem is worthwhile to work on:

If you examine a problem and can’t immediately see a viable way to make money, it probably isn’t the right thing to be working on.

When we started off in the first two markets, we thought that insight on how to make business models would come as we researched further into the problems — it might not be immediately obvious, but there is some way to do it. Most of the time, and for both of our cases, that wasn’t true.

Another thing that really struck me was the delta between what information you could gleam online and the insight that you could gain speaking with people working on the ground. From a cultural perspective, there are things that are obvious to people living in a country that they aren’t translated into written communication, and thus can only be gleaned through conversation. For example, we had no clue that insurers marketed through WhatsApp and other messaging services until we sat down with Indians going through the insurance purchasing process.

LLMs are going to fundamentally revolutionize the way research work is being conducted. Harvey AI just raised $21M for their case law service that provides lawyers with relevant rulings, but I think this is just the beginning. Throughout this month, I’ve used ChatGPT to gain a fundamental understanding of a market in all of 10 minutes, which would have taken hours for a human to research and write up. Moreover, the backlinks to sources are useful to verify information. Interestingly enough, ChatGPT provides a better answer to my question and links to sources that didn’t show up on a similar Google Search, which leads me to question just how much anyone will be using Google beyond simple navigation to other websites.

If you’re not using AI as a productivity booster, you’re going to get left in the dust quite quickly. We saw the use case in insurance, but this is a fundamental paradigm shift across industries — an opportunity that is already being cashed in on. Of course, the software providers are going to be the winners, but a more interesting approach are the hardware builders enabling the LLM architecture in the first place. Established chip manufacturers like NVIDIA, as well as new startups, are going to form a new ‘backbone for the digital economy’, enabling everything else to run, much like the oil was the lifeblood of the 20th century.

Meditations on Failure

This month, I got rejected from RISE Futures and the Masason Foundation. I had spent hours getting feedback from previous winners and organization members, researching past projects, and perfecting my submissions. What’s funny is that I didn’t think that I was naïve for expecting a positive result — it was one of the situations where you’re confident because you’re fully aware of the amount of work you’ve put in.

One of the worst parts about these kinds of processes, whether it’s scholarships or college admissions, is the fact that you never know why you got rejected. I find that one of the greatest fears amongst my peers is not the fear of failure itself, but the fear of not understanding why you failed. You can spend hours theorizing and conducting post-mortems, but in the end, you’ll never get to something actionable because you don’t know what went wrong.

One of the things that I’ve been thinking about is just how much of that failure is internal, attributable to something on my side that I could have done better. It’s neither rational nor useful to assign all of the blame to the external party — despite the ‘perfect fit, high-performing student’ you might be, there is always something to improve on. But it isn’t useful to put all of the blame on yourself, either. These processes are pretty much random once you’ve achieved a certain threshold, and your admission can really depend on the mood of your examiner that day.

When I considered what I could have improved on my side of the equation, including consultation with some of my friends, I realized that I’m not good at selling myself. I know many people that are insanely talented at what they do, yet no one knows about their achievements because they don’t share them. Conversely, there are people who unlock new opportunities simply because they’re good at showing and explaining what they do, whether or not they’re world class.

So, how do you get better at selling yourself?

One of the greatest things that anyone can do for themselves is learning to write and speak eloquently. When you think of anyone you admire as a thought leader, they’re almost always someone who is capable of laying out a pattern of thinking concisely and rationally. Writing forces an individual to calm the chaos of thought in their mind and to distill it into a coherent work. The beauty in writing is that there is always an opportunity for revision. When you’re rereading a paragraph you wrote even an hour ago, there's always an opportunity to rephrase for more clarity, a way to better convey your point.

But writing is only the first step.

One of the most inspirational speakers of all time, Winston Churchill.

Becoming a great orator is the culmination of great writing. The people who have shaped the world into what it is today have done so through inspiration. Speaking is bringing written words to life, adding weight, inflection — in short, everything that makes a language beautiful. Leaving an impression on someone, whether in an interview or throughout life, is about formulating the right things to say and how you go about saying them.

Of course, writing and speaking doesn’t get you all the way to where you need to be — you need experiences, knowledge, reflection — but it does form a base without which you’re unable to function.

Another prerequisite is being interesting. One nugget that has stuck with me is from a trip to Portugal, where my mentor Nadeem shared that his life decisions were made based on what made him more interesting. Funnily enough, that led him down the path of living in Bangladesh while working for Grameen Bank, the pioneer of microfinancing. As I age, I’m realizing that life satisfaction isn’t dictated by the money you’ve made or the status you’ve gained, rather by the experiences you’ve had — they’re what make you, you.

If there’s one person that I can think of that fascinates me more than anyone, it’s Wade Davis. A friend happened to share a podcast episode of his in a Slack message, and I was hooked. The richness of his experiences as an ethnobotanist mixed with his ability to captivate you with the stories he tells are next-to-none. Beyond just sharing fascinating insights into the lives of indigenous peoples, he gives life advice that’s relevant to any age group, no matter where they might be in their lives. It’s a gem of an episode.

I have a few opportunities coming my way over the summer, and it’s my obligation to myself to make the most of them. I don’t care about the regret of missing out — I’m chasing the experience, the relationships, and the serendipity.

Overall, I’ve come to accept that I might well have been qualified, but I didn’t stand out. Instead of worrying about the variables beyond my control, I’m maximizing the variables I can directly influence: interesting-ness, writing, and speech, among others. Now, it’s just a matter of compounding good habits.

A small ask before you go…

I’m running in a Relay-for-Life, a cancer research event. All of the money goes directly to the Canadian Cancer Society, who conduct vital research in cancer screening and prevention. I’ll be donating $100 of my own money, and if there’s anything you’re willing to donate, it would be greatly appreciated. Find the link here.

I’ve also released a new episode of the podcast I co-host with my friend Unmol. Check out the amazing conversation we had with Dr. Kenneth Cassman on the challenges and opportunities facing agriculture today.

See you next month!