Tag Archive for: Strategy

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Introducing Hypernomics

“Everything should be made as simple as possible, but not simpler.”
Albert Einstein

The world oversimplifies.

Want more government revenue? Raise taxes. That’ll work. But why did Nevada make more cannabis tax revenue in 2019 than California with a tax rate of less than half of CA’s?

You’d like the safest helicopter in the world for the president? Put all the widgets on it. Oops, too many, it’s too expensive, Obama cancels it.

Do you like cool? I give you the DeLorean. But it’s under-powered. It won’t sell. The company goes bankrupt.

These are but a few cases where thin study led to bad outcomes. The solution for them and many more is to expand the analysis.

Don’t suppose you can get by with two dimensions when the problem begins with four.

Earlier, I called the field I found Multidimensional Economics. The research revealed that the forces within it exist beyond markets.

Thus, its new name: HYPERNOMICS.

Hyper-: Existing in more than three dimensions: hyperspace

-nomy-: A system of laws governing or a body of knowledge about a specified field: agronomy

-nomic: adj combining form

HYPERNOMICS studies forces working with and against each other in four or more dimensions.

#entrepreneurship #innovation #strategy #success #design

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Demand By Proxy

You can’t always get what you want…

Finding data can be hard. Say you needed to model demand for Japanese bullet train travel, or the London to Paris run. Ideally, both firms would post these figures, and you could reduce that to insight. While you can locate that information for NYC cab data (see one of my previous posts), you won’t for The Shinkansen or the Chunnel. What to do?

Let’s suppose train operators match the number of seats offered by class to their demand. Why wouldn’t they? If they had too many high-priced seats open, they’d either drop the price or change the seating arrangement. Eventually, they would come to a configuration that works most of the time.

Below, we see the number of seats by price for Japanese (A) and European (B) high-speed rail services. By themselves, neither has enough data to form a viable study. Together, in (C), they reveal collective thinking from different sides of the planet – and it’s much the same. Yes, that’s only two routes. More would be better. But this shows us we can gain an understanding of a market using the files we have instead of the ones we want.

…If you try sometimes, you just might find…you get what you need (Mick Jagger/Keith Richards).

#innovation #demand #markets #marketanalysis #strategy

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Fast Trains

“I knew I was going to take the wrong train, so I left early.”
Yogi Berra

So, what’s the right train?

Specifically, what are the most appropriate specifications for new trains we need to move people about here in the United States? Happily, the world already has some blueprints for success.

With over 50 years of experience and a perfect safety record, Japan has been using high-speed rail for some time. They’ve blazed a trail followed by Europe and later by China. Any new railroad project should consider the Shinkansen. In 2011, I had a look.

I found the Value (sustainable price) of a Japanese train ticket as a function of its trip length, MPH, and seat area (all P-values < 0.001) with a 91.3% adjusted R2. Tripling the distance traveled and speed pushed prices up by 88% and 27%, respectively. The added fare for distance made sense, but the speed change seems low. I used net speed, however, which likely understated the Value of the train going fast when it could.

Interestingly, as seat square area increased 47% from unreserved (A) past reserved (B) and green (C) to gran (D), ticket prices went up 88%.

What is the demand for this service compared to its Value? See the next post for some insights.

#innovation #technology #travel #strategy #tips